SEBI Imposes ₹10 Lakh Penalty on Anand Rathi Share and Stock Brokers

The capital markets regulator Securities and Exchange Board of India (SEBI) has imposed a penalty of ₹10 lakh on Anand Rathi Share and Stock Brokers for multiple violations of regulatory norms related to cybersecurity compliance.

Thematic Inspection by SEBI

The penalty follows a thematic inspection conducted by SEBI to assess the broker’s adherence to the regulator’s cybersecurity framework. The inspection covered the period from April 2023 to August 2024 and reviewed the company’s systems, controls and processes related to cyber security.

During the inspection, the regulator observed several deficiencies in the broker’s cybersecurity measures. These included inadequate capacity monitoring systems, weak implementation of password controls, the absence of data leakage prevention mechanisms and the failure to enable multi-factor authentication for certain users.

Gaps in Security Testing and Incident Reporting

SEBI also noted shortcomings in the coverage of vulnerability assessment and penetration testing (VAPT). In addition, the regulator found that a cyber incident involving unauthorised access was not reported to the stock exchanges within the mandatory six-hour window required under the cybersecurity framework.

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Penalty Order Issued

After reviewing the inspection findings, SEBI’s adjudicating officer concluded that multiple violations of the regulator’s norms and stock broker regulations had been established.

Accordingly, the regulator imposed a monetary penalty of ₹10 lakh on Anand Rathi Share and Stock Brokers. The company has been directed to pay the fine within 45 days of the order.

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