The Hindu Business Line : Lapses in opening demat account: Karvy told to conduct probe

NATIONAL Securities Depository Ltd (NSDL) has found lapses by Karvy Share Broking (Karvy) in processing account-opening application for demat accounts. The finding follows NDSL's inspection of Karvy in Yes Bank IPO allotment.

NSDL said bank documents as required by SEBI norms were made available but there have been lapses at Karvy in processing account-opening applications and these have not been dealt with the care with which they ought to be treated.

The Depository has asked Karvy to conduct an enquiry and take appropriate action in cases of both negligence and complicity, NSDL said in a release.

Karvy has been advised by NSDL to identify all those clients (with the addresses mentioned in the SEBI order). In case it is unable to identify the clients, Karvy has been advised to freeze the accounts for all transactions till such time the clients identify themselves.

It has also been asked to take similar action in case of all accounts introduced by the same sub-broker. Till such time Karvy has been advised to stop opening fresh demat accounts.

On common addresses issue, NSDL said Karvy has stated that it never carried out a check based on common addresses. Karvy had claimed common addresses occur because it is a market practice to have company address in case of employees and financier's address in case of IPO financing.

NSDL said it would carry an analysis of the client accounts opened in the previous year where more than 20 accounts have the same address. The know-your-clients documents with regard to such accounts will be scrutinised.

More Stories on : Economic Offences | IPOs

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
TV18 promoter to transfer over 10 pc stake in Network 18

Thanks to bull run, 161 cos move from small to mid-cap segment — `Graduation to continue in 2006 too'

Bulls prevail

Siyaram Silk counting on domestic strength

For Sensex, real peak is still 1992 after adjusting for inflation

SEBI hikes position limits for stock derivatives — To resume fresh registrations for UIN

SEBI allows MFs to launch gold exchange-traded funds — Repetitive disclosures for follow-on public offerings go

Bulls call the shots to wrap up 2005

Underlying equities outperform ADRs

Stocks end 2005 on firm note; Sensex 3rd best in Asia

Lapses in opening demat account: Karvy told to conduct probe