Mumbai: The Securities and Exchange Board of India (SEBI) has issued a regulatory warning to IIFL Capital Services regarding its due diligence in handling debt securities, the company informed the Indian bourses on Tuesday.
The brokerage firm disclosed in an exchange filing that it received an administrative warning letter from SEBI on March 7.
“The order was received on March 10, following an inspection of its merchant banking division’s debt issues between April 1, 2022, and April 30, 2024,” the company said in its filing.
The inspection focused on the company’s compliance with the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021.
The market regulator raised concerns about the disclosure of issue-related expenses and the timelines for payment of fees to intermediaries in offer documents.
Following the company’s response to the inspection findings, SEBI issued the warning letter highlighting these issues.
IIFL Capital has clarified that there is no financial impact on its business due to the market regulator’s action.
The company stated that the warning does not affect its operations or financial performance.
The company’s stock remained stable as it was trading at Rs 207.85, up 1.46 per cent on the Bombay Stock Exchange (BSE) on Tuesday.
Meanwhile, SEBI has taken strict actions in the past against companies for violations in debt merchant banking.
It previously banned Axis Capital and JM Financial from conducting debt merchant banking activities for non-compliance with regulatory norms.
Last week, the market regulator issued an administrative warning to FMCG giant Nestle India for breaching insider trading regulations.
The warning, issued by SEBI’s Deputy General Manager, was addressed to the company’s Compliance Officer (CCO).
SEBI stated that the violation involved a “contra trade,” which occurs when an insider buys or sells shares of the same security within six months of a previous transaction, intending to make short-term profits.
(IANS)
