Prop Trading, Karvy Episode

nikhil27 · November 23, 2019, 12:51pm

@nithin
Is Zerodha involved in Prop Trading?

SEBI bans Karvy Broking for nearly Rs 2000 crore in defaults https://www.thehindubusinessline.com/markets/stock-markets/sebi-bans-karvy-broking-for-nearly-rs-2000-crore-in-defaults/article30053349.ece?utm_campaign=amp_article_share&utm_medium=referral&utm_source=whatsapp.com

lotus · November 23, 2019, 1:25pm

All Brokers’s involved in Prop Desk.

Riyas_Ahamed · November 23, 2019, 1:51pm

zerodha involved in prop trading

Bhuvan · November 23, 2019, 2:02pm

Answered here:

Prakhar_Agrawal · November 23, 2019, 2:17pm

What’s happening go their existing clients now , are they able to withdraw their funds or safeguards their holdings made through karvy.
Does anyone uses karvy here?

siva · November 23, 2019, 2:34pm

May be monday we should able know.

noid · November 25, 2019, 4:04am

From the reports I have read, it seems Karvy misused the POA given by clients (to enable trading) and used it to transfer client’s shares into their own account and then sold them, pocketing the cash.

Operationally, every time there is a debit/credit in my demat account, I get an sms AND email, end of day from both the depository and NSE/BSE - did this not happen with Karvy customers? or where these details changed by Karvy? if so:

How easy is it to change these details given that they are part of the elaborate cKYC process?
What safeguards have been placed by Zerodha (or other brokers / SEBI mandates) to ensure that this cannot be done at a corporate level or by a group of bad actors within an organization?

I did read the post by @nithin but it does not touch upon these likely process gaps - possibly everyone is still awaiting details of the modus operandi.

Edit: As pointed out by @Siva, alerts are only for debits.

Prakhar_Agrawal · November 25, 2019, 4:06am

How to enable sms/email from depositories. I don’t get them.

VenuMadhav · November 25, 2019, 4:56am

If you’ve opened your demat account at Zerodha, we would have already enabled the SMS alert facility for you. Whenever stocks get debited from your demat account, you would receive an SMS from the Depository (CDSL). You can verify this from the CMR copy sent to you when your account was opened, you’ll find the ‘SMS register’ option to be ‘Yes’ and the number would be mentioned there:

Prakhar_Agrawal · November 25, 2019, 5:03am

Okay but I don’t get them when stocks being credited to my account, is there a way to enable sms facilities for stocks or bonds being credited to demat.

siva · November 25, 2019, 5:04am

SMS is for debiting not crediting.

Riyas_Ahamed · January 14, 2020, 1:53pm

MORE COCKROACH ON THE SYSTEM - SEBI WORRIED

SEBI cancels registration of stock broker Click2Trade Capital

The regulator, which initiated enquiry proceedings against Click2Trade in respect of alleged violation of stock brokers norms, found that the entity failed to segregate its own transactions from that of its clients, reported incorrect margin and used client bank accounts for other than specified purposes.

Markets regulator SEBI has cancelled the registration of Click2Trade Capital as it “grossly” failed in performing its duties as a stock broker and made serious lapses in maintaining infrastructure and did not redress investor grievances.

ShubhS9 · January 14, 2020, 4:21pm

If SEBI digs more deeper they are going to find even more cockroaches. They need to come up with tight new framework and get rid of all these bad apples before it’s too late.