Being registered sub broker of sebi & other exchanges. For business development expansion and trading propose in market can take hand loan @40% pa from my friends or their relatives by making promissory not or MOU on letter head its an economics crime /offences ? It is permissible / not allowed /prohibited /bans any other punishments?
You can take loans from your friends on your personal level. However you cannot use the trading member's letter head. Also, these relatives of yours should not be the clients of the Stock broker. Any unauthorised act of collecting money from clients in the name of Sub-Broker shall amount to an economic offence and shall be punishable under SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to The Securities Market) and SEBI( Stock Brokers and Sub Brokers) Regulations, 1992.
Research by - Sammanika Rawat, Lawfarm
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