Quick Summary
On June 9, 2025, SEBI Adjudicating Officer Amit Kapoor fined Motilal Oswal Financial Services ₹3 lakh after a thematic inspection on control over authorised persons. She held four findings established: terminals running from unapproved places and users, weak review of agent inspection reports, fund based dealings by two agents and an agent’s staff logging into a client account. The order notes no client complaint. This page tells the story and what it means if you deal through an agent.
Many investors never visit a broker’s office. They meet a local agent, called an authorised person, who opens the account and takes the orders.
SEBI’s rules say the broker stays responsible for that agent.
This order tests that rule on two agents of Motilal Oswal.
What Did SEBI Find When It Visited in March 2024?
SEBI’s inspectors came on March 1 and 4, 2024, with a single theme: control over authorised persons.
They reviewed April 1, 2022 to January 31, 2024.
The firm replied to the findings on May 15, 2024. A show cause notice followed on August 27, 2024, and the hearing took place on January 20, 2025.
Two agents sit at the center of the story: Merit Capital Market Services and Triventure.
Where Were the Trading Terminals Really Running?
The first discovery came from simple footwork.
SEBI said 13 NSE terminals of one agent were not at the address on record in Delhi, and trades had run from five of them. Nine BSE terminals were also missing, with trades from one.
The firm explained that the terminals sat at an additional branch, and that it had applied to the exchanges on March 6, 2024.
NSE approved on March 14 and BSE on March 21.
The officer pointed to the order of events. Terminals had started running from the new branch before approval, so she held the defence not tenable.
She also held that four NSE terminals were operated by people other than the approved users, and that some BSE users had no valid NISM certification.
Did Motilal Oswal Look Closely Enough at Its Agents?
A broker must inspect its own agents and report what it finds. The officer held that here the review fell short.
For one agent, the firm closed its inspection report without taking six months of bank statements.
When SEBI later obtained them, they showed ₹19.56 crore in transactions with registered clients.
For the other, the firm collected loan agreements and unlisted share agreements but did not notice that the agent was taking client funds.
What Money Was Moving Between Agents and Clients?
Agents may only introduce clients and give administrative help. No client money or securities may go to an agent’s account.
For the first agent, SEBI found a fund based relationship with 36 registered clients.
It recorded ₹18.31 crore received and ₹1.24 crore paid, and loan agreements the officer called identical, unstamped and interest free.
For the second, 99 transactions with clients appeared among dealings with 228 parties, with ₹5.69 crore paid to clients and ₹5.06 crore received.
The firm said the money covered loans, consultancy, salaries and referral fees, and none of it was for trading.
The officer held that revenue sharing with clients is not in the spirit of the code of conduct, and noted that much of the support was missing.
Who Logged In to a Client’s Account?
One finding reads like a warning to every investor. An employee of one agent logged into a client’s account using the client’s own credentials.
The firm said the client had given an authority letter, and argued that a broker is not liable for an agent’s unauthorised acts.
The officer rejected that argument.
She held that the agent is the broker’s agent, and that the broker is responsible for all acts of omission and commission of its agents and their staff.
How Did the Officer Reach ₹3 Lakh In Motilal Oswal June 2025 SEBI Order?
She imposed a single ₹3 lakh penalty under Section 15HB.
She found no quantifiable gain and no ascertainable loss, and she noted that no client complaint had been brought on record.
In the firm’s favour, she weighed the corrective action it took after the inspection.
Against it, she weighed that it had been penalised several times before.
The order describes failures of control. It records no fraud finding and no client loss, and this page does not suggest otherwise.
A record of repeat penalties naturally makes people ask, is Motilal Oswal reliable? This order cannot settle that alone.
It covers one inspection and two agents, so your own contract notes and payment trail count just as much.
What Should You Do If You Deal Through an Agent?
Ask where your money goes. Payments should go to the broker’s account, never to the agent’s personal account.
Never share your login or one time password with anyone. If an agent asks for them, treat it as a warning sign.
If an agent has taken your money, our guide to file complaint against stock broker explains how the broker’s responsibility for its agents works in a complaint.
When the broker’s answer falls short, you can file complaint in NSE and move toward arbitration with the right evidence.
All five orders sit together on our master page on the SEBI penalty against Motilal Oswal.
Lost money through an agent?
We trace the payments, match them with the broker’s obligations and draft the complaint. Register with us for a free consultation.
Report. Recover. Stay Fraud Free.
Frequently Asked Questions
Yes, according to this order. The officer held that the broker is responsible for all acts of omission and commission of its agents and their staff.
No. The officer could not ascertain any investor loss and noted that no client complaint was on record.
SEBI imposed a ₹3 lakh penalty for authorized person control lapses, and you can read the full text directly on the official SEBI website.
Add us as a preferred source on Google »
