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CS Professional · IFSCA - Regulations, Listing and Compliances · Capital Market Intermediaries

IFSCA suspends the registration of a stock broker in GIFT IFSC pending inquiry. The broker has open client positions and pending settlement obligations. Which statement is most consistent with the regulatory intent?

A suspended broker cannot take fresh regulated business, but it stays liable to existing clients and must settle pending transactions in an orderly way. Suspension does not wipe out accrued obligations, and it is not merely cosmetic, since investor protection is the aim.

  1. ASuspension ends all obligations to existing clients immediately, including settlement
  2. BThe broker may freely open new client positions because only cancellation restricts business
  3. CSuspension is purely cosmetic and has no effect on activities
  4. DThe broker must not take on new business as an intermediary, yet remains answerable for obligations to existing clients and for settlement of pending transactionsCorrect

Explanation

Suspension restricts the intermediary from carrying on regulated activity, but obligations already incurred toward clients and the market do not vanish; the Authority typically directs orderly handling of existing positions to protect investors. Option A wrongly extinguishes liabilities, and option B wrongly treats suspension as harmless.

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