The Securities and Exchange Board of India on Friday said that the clients of Karvy and Pratik depository participants must switch over to some other DP following the alleged involvement of these brokerages in the initial public offering scam.
Meanwhile, Indiabulls Financial Services Ltd, one of the 24 operators banned by Sebi on Thursday, said it will contest the Sebi order, which debarred it from dealing in the equity market.
Indiabulls informed the Bombay Stock Exchange that the order was based on 'factually incorrect data' and it would be contesting and filing its objections against the market regulator's order.
The only allegation against Indiabulls Securities in the Sebi order is that the company received 13,939 shares of TCS after its IPO from 559 different accounts, it said.
Meanwhile, in a clarification the Sebi said: 'It is clarified that the directions 'not to buy, sell or deal in the securities market including in IPOs, directly or indirectly, till further directions' in the interim order WTM/GA/60/ISD/04/06 relating to IPOs issued on 27/4/2006, in so far as they relate to brokers who are Sebi registered intermediaries would apply only in respect of transactions in the proprietary account of brokers and the transactions on behalf of clients would remain unaffected.'
'The same clarifications apply to DP operations wherever they are depository participants.'
'It is clarified that the DP transactions of clients would remain unaffected only for 15 days, by which time switchover to another DP should take place in respect of directions against Karvy DP and Pratik DP.'