IIFL Securities to challenge SEBI’s order on customer enrollment ban

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IIFL Securities plans to move the Court of Appeals for Securities Exchange v. SEBI An order banning the brokerage firm from registering new clients for two years.

The order does not affect the company’s existing business with existing clients, IIFL Securities said.

The said matter relates to inspections that were conducted for various periods from April 2011 to January 2017 before SEBI issued the Enhanced Supervision Circular dated 26 September 2016. The Enhanced Supervision Circular was effective from 1 July 2017.

SEBI’s order applies to the circular even with assurance that after it became effective, there was no non-compliance with it, IIFL Securities reported.

The order records stated, “I find no case of misuse of client funds by the notice before me which occurred after the enforcement of the Enhanced Moderation Circular dated September 26, 2016.”

The brokerage firm said that the company is in the process of preferring an appeal against the aforementioned order to the Securities Court of Appeal.