Summary of Final Order in the matter of IIFL Securities Limited

1.??????SEBI conducted a thematic inspection of the books of accounts of IIFL (Noticee) and revealed the following discrepancy which leads to violation of SEBI Broker Regulation.

2.??????Noticee had not nomenclated 26 of its 45 clients’ accounts as ‘client account’ in bank record ?despite issuance of a warning by BSE.

3.??????Noticee had opened four accounts with Axis Bank, Citi Bank, HDFC Bank and ICICI Bank, all were nomenclated as ‘control accounts’.

4.??????Noticee was collecting funds of its own as well as of its clients in the aforesaid four accounts, before transferring funds to ‘Exchange Settlement Accounts.

5.??????Funds were being flown out from the aforesaid Pool Accounts and the same were being used for own purposes of noticee such as investment in mutual funds, transfers to group companies, foreign remittance expenses, salary and accounts etc.

6.??????By doing this act its clear that , Noticee was mixing funds of its own with its clients’ funds before transferring them in ‘Exchange Settlement Accounts’.

7.??????Noticee has done misutilization of funds of clients having credit balance, for settlement obligation of clients having debit balance as well as its own proprietary trades on several occasion.

8.??????Hence its conclude that Noticee was not acting with due care and diligence while conducting its business thus violated the SEBI Broker Regulation.