SEBI issues warning to DAM Capital over operational deficiencies

New Delhi, March 21 (IANS) Recently-listed DAM Capital Advisors on Friday said the Securities and Exchange Board of India (SEBI) has issued an administrative warning to it over certain operational deficiencies in its institutional broking business.

The capital markets regulator sent the warning and deficiency letter, advising DAM Capital to be more cautious in its operations.

“Pursuant to the provisions of Regulation 30 read with Para A of Part A of Schedule III of the SEBI Listing Regulations, we hereby inform that the Company has received administrative warning and deficiency letter on March 20 issued by SEBI vide its letter dated March 20 advising us to be vigilant in future for certain operational related matters of our Institutional broking operations,” the company said in its stock exchange filing.

The observations were based on an inspection conducted by SEBI between February 1, 2024, and August 31, 2024, before the company’s equity shares were listed.

DAM Capital stated that it has already addressed the issues raised by SEBI and has implemented necessary compliance measures to align with regulatory norms.

The company also clarified that the SEBI letter does not impact its financials, business operations, or overall activities.

“There is no impact on financial, operation or other activities of the Company pursuant to the abovementioned letter,” the company added.

In its filing, DAM Capital revealed that SEBI conducted a thematic inspection in January 2025, focusing on the "Upstreaming and Downstreaming of Clients’ Funds."

After reviewing the company’s responses, SEBI pointed out areas that needed improvement. These included delays in transferring client funds to the Clearing Corporation, instances where brokerage amounts were credited directly to the company’s bank account instead of the designated settlement account, and reporting deficiencies such as incorrect values and missing retention reason codes in the segregation file.

Despite the regulatory warning, DAM Capital's stock performed strongly in Friday’s trading session. Its shares closed nearly 5 percent higher at Rs 232 per share on the National Stock Exchange (NSE), reflecting a gain of 4.68 per cent.

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