SEBI allows Karvy to serve its existing clients

Mumbai, May 27: Market regulator Securities and Exchange Board of India (SEBI) has partially lifted the ban on Karvy Stock Broking, Jhaveri Securities and Magnum Equity Services as per the revised order issued yesterday.

The order, issued by SEBI Member G Anantharaman, allows Karvy Stock Broking to serve their exisitng clients, but it cannot enroll new clients as depository participant (DP).

The latest order has directed Karvy to stay away from proprietary trades in securities till enquiry is on and passing of final orders, except for acting on the instructions of existing beneficial owners, so that the interests of existing beneficial honour (BOs) remain unaffected.

Karvy as a registrar has been allowed to work for the exisitng clients contracted before passing of interim order but prohibited from taking up fresh issue and as a share transfer agent till the enquiry gets over and final orders are passed. But Karvy can act as Registrar and Transfer Agent to Mutual Funds.

SEBI modified its interim order after personally hearing the Karvy's case on May 9, wherein the oral and written submission were made by Karvy Group, the SEBI release said.

In case of Jhaveri Securities, SEBI order relating to opening of fresh demat accounts will continue and and all other directions in the interim order have been lifted.

In case of Magnum Equity Services, the market regulator has completely lifted its interim order, because, SEBI felt, it had acted only as a broker for Dushyant N Dalal for transaction in the shares of Shoppers Stop and not as a financier.

Jhaveri Securities and Magnum Equity Services' case also came for personal hearing on May 4, wherein submissions were made by them, SEBI said.

The revised order has further diluted its interim order of April 27 in the IPO 'scam' investigation that led to stock markets crash on April 28.

UNI