SEBI Rests Case After Groww Invest Tech Pays Rs.47.85 Lakh For Violating Norms
The company was accused of breaching provisions of the contracts and circulars
Online investing platform, Groww Invest Tech, has settled a case with the Securities and Exchange Board of India (SEBI) by paying Rs.47.85 lakh for alleged violations of stockbroker regulations.
The markets regulator had observed discrepancies in its client statements and flagged non-securities services. It also noted issues with the Business Continuity Plan (BCP) and surveillance framework.
The settlement order came after SEBI received an application from the broking company “without admitting or denying the facts and conclusion of law.”
Amit Kapoor, the adjudicating officer of SEBI, remarked, “In view of the acceptance of the settlement terms, the adjudication proceedings initiated against the applicant vide a 25 November 2024 show-cause notice are disposed of.”
The case stemmed from a scrutiny of Groww Invest (formerly Nextbillion Technology Pvt Ltd), wherein the regulator accused the company of violating multiple provisions of the contracts, circulars and stockbroker regulations.
SEBI noted that Groww Invest sent retention statements containing incorrect information to clients, viz., discrepancy in financial ledger balance and margin obligation in 38 instances.
It also flagged the company for offering non-securities services such as UPI payments and bill payments through its trading app, which could expose users to financial liability.
The markets watchdog also found that Groww Invest’s BCP was reviewed annually instead of the mandated half-yearly frequency. It noted inadequacies in the firm’s surveillance framework, particularly in analyzing client trades based on financial capacity and updating income details.
Thereafter, SEBI sent a show-cause notice to Groww Invest.
However, pursuant to the receipt of the settlement application, Groww Invest filed revised settlement terms. On remitting the fees, the matter was settled.
However, SEBI has reserved the right to reopen the case if it finds the company has not made full disclosures or breached the settlement terms.