Merrill Lynch pays Rs 60 lakh to Sebi as settlement charges

Global investor Merrill Lynch has paid a consent fee of Rs 6000000 to the market regulator Sebi for settlement of cases pertaining to non-disclosure of identity of its clients. Following the payment of Rs 6000000 by the Merrill Lynch Capital Markets,an FII (Foreign Institutional Investor) registered with the Securities and Exchange Board of India (SEBI),the regulator has decided to dispose off the proceedings against the company,a Sebi order said. The case relates to dealings in securities by Merrill Lynch in May 2004 during which it executed trades in the cash and futures and options (Fand O) segments on behalf of its clients which were mostly hedge funds. During the course of inquiry into the trade dealings,Sebi sought details of clients and fund managers from Merrill Lynch. “However,the applicant (Merrill Lynch) had failed to furnish the complete details of the information sought by Sebi even after repeated requests ... The information with respect to certain institutional investors was furnished only after repeated follow ups,resulting in delay in investigations,” the order said. The company refrained from passing on information sought by the Sebi citing reasons such as “confidentiality provision in the client agreement.” Even as the proceedings were going on,the company proposed settlement of the issue through a consent order and paid settlement charge of Rs 6000000. The consent terms were accepted by Sebi.