Winning Bizness Desk Mumbai. The Securities and Exchange Board of India (SEBI) has levied a penalty of ₹10 lakh on Axis Securities Limited for violations of stockbroker regulations and other regulatory norms. The brokerage firm is required to remit the fine within 45 days, as stipulated in SEBI's recent order. Regulatory Lapses Identified In an 82-page order, SEBI detailed multiple areas where Axis Securities failed to adhere to regulatory procedures. Notably, the firm exhibited inconsistencies in its enhanced supervision reporting to stock exchanges and discrepancies between stock statements and actual holdings in depository accounts. These lapses indicate a significant deviation from mandated compliance standards. Improper Handling of Client Funds SEBI's investigation further revealed that Axis Securities did not manage client funds in accordance with regulatory requirements. The firm failed to settle client funds and securities based on the preferences obtained from clients and did not provide retention statements along with account details. Additionally, the brokerage transferred securities of clients with credit balances to a "client unpaid securities account," bypassing proper procedures. Mismanagement of Client Complaints and Penalties The order also highlighted that Axis Securities did not adequately address client grievances. Moreover, penalties imposed by stock exchanges for insufficient upfront or non-upfront margin collection were inappropriately passed on to clients. Such practices contravene established norms designed to protect investor interests and ensure fair treatment. Outcome of SEBI's Inspection This enforcement action follows SEBI's inspection of Axis Securities, covering the period from April 2021 to November 2022. The findings from this inspection led to the imposition of the ₹10 lakh fine, underscoring SEBI's commitment to maintaining strict compliance within the capital markets.