Motilal Oswal Financial Services receives an administrative warning from SEBI

The capital market regulator, Securities and Exchange Board of India (SEBI) has issued Motilal Oswal Financial Services Ltd with an administrative warning, the company stated in an exchange statement on Tuesday, July 2.

According to the stock brokerage company, SEBI periodically carried out many audits of its several regulated operations. In an exchange filing, the brokerage firm assured that there is no impact on the company's finances, operations, or other activities.

According to the company's filing, the SEBI made a remark on the broking procedure for the uploading of customer Unique customer Code (UCC) data on the Multi Commodity Exchange of India Ltd platform.

Further, the notice, which is included in a letter from SEBI dated June 28, 2024, warns the business to be cautious going forward with small operational issues.

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The consolidated net profit for the March quarter of Motilal Oswal Financial Services jumped by a staggering 334% YoY, to ₹724.6 crore, according to news reports. A year earlier, the same amount was ₹167 crore. Operating income for Motilal increased by 108% year over year to ₹2,141.3 crore from ₹1,027.4 crore.

Earnings Before Interest, Tax, Depreciation, and Amortisation, or EBITDA, increased to ₹1,231.5 crore for the quarter from ₹443.7 crore in the same period the previous year. The total amount in the company's securities premium account as of March 31, 2024, was ₹534.9 crore.

Motilal Oswal Financial Services share price closed over 4% lower at ₹566.85 apiece on the BSE, on Tuesday's session.

A day after stock exchanges and other market infrastructure institutions (MIIs) were instructed by markets regulator SEBI to adopt a consistent and equal price structure for all members instead of altering costs based on their volume or activity, stock broking companies' shares saw a dip on Tuesday.

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Nilesh Sharma, President & Executive Director of SAMCO Securities, stated that the recent SEBI Circular, "Charges levied by Market Infrastructure Institutions (MIIs) – True to Label," which was published on July 1, will significantly affect the stock broking industry's revenue and, consequently, trading volumes. Exchanges charge its brokers a monthly transaction fee for trades executed on their platform.

" This transaction charge is the primary source of any exchange’s income. NSE in its financial results for the quarter ended March 2024 have stated revenue from transaction charges to be 74% of its total consolidated revenue.

NSE levies these transaction charges on a slab basis for the month. However, the brokers collects this charge from the end clients on a daily basis. The brokers collect this charge at the highest slab rate and the difference is shown as a net profit in their books," said Nilesh Sharma, President & Executive Director at SAMCO Securities.

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