KFin Technologies Pays ₹87.7 Lakh To Sebi To Settle RTA Rule Violation Case

New Delhi, Aug 26: KFin Technologies on Tuesday paid Rs 87.7 lakh to markets regulator Sebi to settle a case related to alleged flouting of regulatory norms.

The development came after KFin Technologies filed a settlement application in August 2024, requesting the regulator to settle the adjudication proceedings.

Sebi Will Not Pursue Enforcement Proceedings

As per the settlement order, the markets watchdog will not initiate enforcement proceedings against KFin Technologies for the violations. However, Sebi retains the right to take further action if any misrepresentation is discovered or if the company breaches any terms of the settlement.

"The instant adjudication proceedings initiated against the applicant (KFin Technologies) vide SCN (show cause notice) dated July 8, 2024, are disposed of," Sebi's Adjudicating Officer Jai Sebastian said in the settlement order.

Inspection Findings Highlighted Deficiencies

The order came after Sebi had undertaken an inspection of KFin Technologies for the period February 1 to November 30, 2023. Thereafter, findings of the inspection were communicated to the applicant by the market watchdog.

Sebi found that KFin Technologies has failed to exercise due diligence while processing the request for dematerialisation of shares. Therefore, it was alleged that the applicant had violated the provisions of the RTA (Registrars to an Issue and Share Transfer Agents) rules.

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The regulator also observed that KFin had allegedly failed to mark folios not having PAN details (17.98 lakh folios) or bank account details (17.75 lakh folios) for enhanced due diligence. Therefore, the applicant had violated the Sebi norms.

Show Cause Notice and Settlement

Thereafter, the regulator issued an SCN on July 8, 2024, to the applicant. Following the application, KFin Technologies filed revised settlement terms, paid Rs 87.75 lakh, and settled the matter.

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