SEBI Slaps Penalty on SMC Global Securities Over Client Order Records and Agent Supervision Lapses — October 2, 2026

Capital markets regulator Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of Rs 1 lakh on listed brokerage firm SMC Global Securities Ltd for failing to adhere to regulatory norms concerning client order-placement records and the oversight of an authorised person.

The regulatory order followed a thematic inspection carried out by SEBI covering the period from January to September 2024. The inspection primarily evaluated the broker's handling of unauthorised trading complaints and the robustness of its processes for capturing and maintaining client order instructions.

Key Findings from the SEBI Inspection

SEBI observed multiple regulatory lapses during its examination of the broker’s operational books and records:

• Missing Order Placement Records: SMC Global Securities failed to maintain appropriate pre-order placement records for certain clients and was unable to produce relevant verification logs for multiple executed trades. Under regulatory mandates, brokers must maintain unambiguous records of client instructions prior to executing market orders.
• Inadequate Oversight of Authorised Person: The market watchdog flagged serious gaps in the broker's supervision of authorised person Amit Lilhare. Deficiencies included a failure to adequately monitor bank accounts receiving commission payments and an absence of proper verification mechanisms for client fund payout requests.
• Suspicious Fixed Payout Schemes: SEBI’s examination revealed that out of 343 active clients mapped to Amit Lilhare, 161 clients exhibited an unusual pattern of fixed payouts. The transactions under this pattern involved cumulative client investments of Rs 6.11 crore and payouts exceeding Rs 1.84 crore during the inspection window.

Regulatory Stance and Industry Impact

SEBI ruled that the brokerage had flouted provisions under the SEBI (Stock Brokers) Regulations alongside circulars governing market conduct.

SMC Global Securities is registered with SEBI and operates as a trading member across premier Indian exchanges, including the National Stock Exchange of India (NSE), BSE, Multi Commodity Exchange of India (MCX), and the National Commodity and Derivatives Exchange (NCDEX).

For Indian market participants, the order highlights the regulator’s continued zero-tolerance approach toward lapses in order validation and channel partner oversight. Stock brokerages are required to exercise strict control over their branch networks, franchisees, and authorised representatives to prevent unauthorised transactions and assure retail investor protection.

Tags: SMC Global Securities SEBI NSE BSE Stock Broking Capital Markets