In its probe, which was launched on June 17, 2025, the market watchdog found that the brokerage lacked compliance with several stockbrokers regulations. The inspection was conducted for the period between April 1, 2023 and August 31, 2024.
In a 42-page order, Sebi said Anand Rathi had failed to report the technical glitches within the stipulated time of May 21, 2024.
The company, in its defence, said it had informed the exchanges about the glitch within an hour of the incident while submitting the preliminary report the next day. However, it acknowledged the delay in submitting the Root Cause Analysis (RCA).
The order also noted that Anand Rathi had breached capacity utilization limits by exceeding 70% of the installed capacity by setting it at 85% and 95%.
The brokerage firm was also found to be violating patch management norms.
Among other things, Anand Rathi violated the provisions related to the password policy.
SEBI also found that Anand Rathi did not have adequate data leakage prevention (DLP) systems during the inspection period as required under the Securities and Exchange Board of India regulations and National Stock Exchange of India guidelines.
Although the broker claimed that it had earlier deployed the McAfee solution in 2020 and later implemented Zscaler, Sebi noted that the McAfee subscription expired in December 2021 and there was no evidence of renewal or active use during the observation period. Evidence provided for the Zscaler system shows implementation only after inspection.
Accordingly, SEBI concluded that the broker had violated data protection provisions requiring deployment of tools to detect and prevent data leakage.
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