SEBI Fines Angel One ₹3 Lakh For Allowing Unauthorized Terminal Operations And Failing To Supervise Authorized Persons
Pranav B Prem
The Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of ₹3 lakh on stock broking firm Angel One Limited for multiple regulatory violations, including allowing unauthorized persons to operate trading terminals, failure to maintain proper supervision over its Authorized Persons (APs), and lapses in updating key client information. The order, passed by Adjudicating Officer Jai Sebastian, follows a joint inspection carried out by SEBI and the National Stock Exchange of India (NSE) for the period between January and June 2024, which primarily focused on the firm’s Authorized Person, Mr. Ashwin Thakkar. The inspection revealed several irregularities, including unauthorized access to trading terminals, use of terminals from unapproved locations, and inadequate monitoring by the broker.
According to the adjudication order, six individuals, including two other Authorized Persons—Mr. Vipul Sanghvi and Mr. Kartik Tanna—were found to have operated trading terminals mapped to AP Ashwin Thakkar without proper approval. The investigation further revealed that four trading terminals were being operated from locations different from those reported to the exchange, and that internal audits conducted by Angel One failed to detect these violations.
In its defence, Angel One argued that the lapses were inadvertent and that all individuals operating the terminals were either approved users or employees associated with the AP. The broker maintained that any operational irregularities stemmed from the AP’s independent actions beyond its control, and therefore liability should not be extended to the firm. It also emphasized that it had conducted inspections, collected compliance undertakings, and maintained a risk-based supervision framework in line with SEBI’s circulars.
However, the Adjudicating Officer rejected these contentions, noting that as per SEBI’s regulatory framework, a stock broker is vicariously liable for all acts of omission and commission of its Authorized Persons and their employees. The order observed, “The stock broker is responsible for all acts of omission and commission of its APs and/or their employees, including liabilities arising therefrom. The Noticee, being a stock broker, is duty-bound to ensure that its APs abide by all applicable laws. It is a serious activity to be undertaken by the Noticee and cannot be dismissed as a casual exercise.”
The inspection also found that Angel One had failed to promptly update the revised net-worth and income details of its AP, despite receiving the necessary documents in February 2024. The regulator noted that the updated details were recorded in the exchange’s database only in September 2024, several months after the inspection period, and that the broker had also failed to identify the AP’s trading activities with other stock brokers in violation of exchange circulars.
While the company contended that it relied on undertakings provided by its APs and that the delay in updating information was a “procedural oversight” with no mala fide intent, SEBI held that such explanations could not absolve the broker of responsibility. The order also pointed out that Angel One’s internal audits had not detected these violations, which highlighted deficiencies in its supervisory mechanisms.
In its concluding observations, SEBI stated that although the broker later took corrective measures—such as disabling the concerned trading terminals on August 1, 2024, and cancelling the AP registrations on August 13, 2024—these steps were remedial in nature and did not negate the fact that violations had already occurred. The regulator found Angel One in violation of various NSE circulars dated August 29, 2002, September 25, 2002, April 13, 2017, May 22, 2023, and June 2, 2023, read with Regulations 9(b), 9(f), and 26(xix) of the SEBI (Stock Brokers) Regulations, 1992.
Accordingly, SEBI imposed a penalty of ₹3,00,000 (Rupees Three Lakh only) under Section 15HB of the SEBI Act, 1992, holding that Angel One Limited failed to exercise adequate supervision and control over its Authorized Persons and was responsible for regulatory non-compliance. The order directed that the amount be paid within 45 days of receipt of the order. Thus, the adjudication concluded with SEBI affirming the principle that a broker bears ultimate responsibility for ensuring compliance by its Authorized Persons, and that failure to do so invites penal consequences irrespective of remedial actions taken later.
