The Securities and Exchange Board of India on Friday said Karvy Stock Broking could continue to service its existing DP (depository participant) accounts, though the embargo on new DP accounts would remain.
Karvy can also continue with its mutual fund registry work including new fund offers, but is barred from taking up any new initial public offer work till the Sebi enquiry is over.
The Sebi interim order follows hearing of the Karvy case on May 9. The order of the capital market watchdog is in line with the Andhra Pradesh high court's order that provided partial relief to the firm, ruling that the existing investors of Karvy were not required to switch to other depository participants.
Pending enquiry and passing of the final order, Sebi today directed Karvy not to undertake any proprietary trades in securities, either off-market or on-market.
"The order gives us some respite as we can continue to hold back and service our 725,000 DP customers. Clarity on the mutual fund registrar business is also a welcome relief. We will plead for expediting the enquiry process," said J Ramaswamy, vice-president, corporate affairs, Karvy Stock Broking.
Sebi said an officer had already been appointed under the enquiry regulations to conduct the probe.
The regulator also clarified that "the present order gives only a prima facie finding as to the necessity of passing the above directions at this stage and, accordingly, all contentions are left open to be decided by the enquiry officer and in subsequent proceedings pursuant to his report."