The Securities and Exchange Board of India (SEBI) on Friday imposed a fine of Rs 10 lakh on Anand Rathi Share and Stock Brokers for multiple violations of market regulatory norms, following a detailed inspection of the brokerage’s systems and processes.

The inspection, conducted for the period from April 2023 to August 2024, focused on the broker’s compliance with SEBI’s Cybersecurity framework. SEBI identified several lapses, including insufficient capacity monitoring mechanisms, weak password controls, absence of data leakage prevention measures, and the failure to enable multi-factor authentication for certain users.

The regulator also noted deficiencies in vulnerability assessment and penetration testing (VAPT) coverage. A significant concern highlighted was that a cyber incident involving unauthorized access was not reported to stock exchanges within the mandated six-hour window, a requirement under SEBI’s cybersecurity guidelines.

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After reviewing the inspection findings, SEBI’s adjudicating officer concluded that Anand Rathi Share and Stock Brokers had breached multiple provisions under SEBI’s norms and stock broker regulations. The fine is intended to penalize the brokerage for these lapses and reinforce compliance with cybersecurity standards in the capital markets.

The brokerage has been directed to pay the penalty within 45 days. Analysts say the action underscores SEBI’s increased focus on strengthening cybersecurity practices across market participants amid rising digital vulnerabilities in the financial sector.

This move also serves as a cautionary reminder to other brokers to implement robust cyber-risk controls, timely reporting protocols, and regular system audits to prevent potential market disruptions and protect investor interests.

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