SEBI Bans Prabhudas Lilladher from New Business for 7 Days

In a move aimed at tightening oversight of market intermediaries, SEBI barred Prabhudas Lilladher Private Limited from onboarding new clients for seven days, starting December 15, 2025. The enforcement action follows a joint inspection by SEBI and stock exchanges that flagged lapses in how the broker handled client funds, margin reporting and the settlement process. At the core was the finding that on three sample dates the broker’s G-value—used to verify that client funds plus collateral cover total credit balances—was negative, showing a shortfall of about Rs 2.70 crore and signaling possible misallocation of client money.

The regulator singled out specific settlement failures: funds for over 1,200 clients were not settled within the mandatory quarterly or monthly timelines. The order details 1,283 non-traded client funds (quarterly) totaling Rs 36 lakh not settled on time, 677 monthly non-traded instances totaling Rs 2.85 crore, and three traded-client quarterly cases involving Rs 39 lakhs. Additional operational lapses included the incorrect End of Day and Peak margins, with margins reported to exchanges that were not actually collected and a short collection of peak margin in one instance.

The scope of the probe covered operations from April 1, 2021, to October 31, 2022, and the order notes that the action goes beyond the G-value finding to flag broader systemic issues in fund handling and margin controls.

For Prabhudas Lilladher, the ban restricts onboarding new clients for seven days, a period regulators say is meant to prompt a review of compliance processes. The broker will have to comply with the order and may contest aspects through due process. Investors and other market participants are watching closely as authorities continue to scrutinize brokerages for fund safety and accurate reporting.

Cover image source: Sebi Plans Online Disclosure of Cos' Names, Reg Numbers 🔗

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