SEBI clamps down on stock broker Karvy for client defaults. Other brokerage houses could also be probed. Charles Schwab to buy TD Ameritrade.
Broker Goes Broke: Recently, market regulator SEBI banned stock broker Karvy Stock Broking (KSBL) for client defaults to the tune of INR2,000cr making it one of the country’s largest cases of equity broker defaults. In an ex-parte interim order, SEBI also banned Karvy from not only from taking new clients but also from executing trades for existing clients.
KSBL said it has around INR25-30cr worth of outstanding dues to less than 200 clients. “The whole issue is of outstanding payment to around 150-180 clients of the brokerage...and in the next few days (or could be less than a fortnight) the payments to these clients would be cleared,” Karvy Group Chairman C Parthasarathy reportedly said. Hindu BusinessLine
As of date, it is estimated that around 5,000 brokers and brokerage houses are active in Indian equity markets. SEBI's gag order on Karvy is likely to lead to a wider investigation into the country's brokerage houses. Deccan Herald
What's in a Billion?: Charles Schwab on Monday announced plans to buy discount brokerage rival TD Ameritrade in an all-stock deal valued at $26 billion. The merging of these two discount brokers will create a mammoth with more than $5tr in client assets. CNBC
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