Mumbai: Securities and Exchange Board of India (SEBI) has warned BSE broker J M Morgan Stanley Retail Services Pvt Ltd for alleged technical lapses and asked it to be more diligent in future regarding their activities in the capital market.

"Based on the facts and circumstances, I have thought it fit to reduce the penalty as proposed by the inquiry officer and accordingly I find that a warning would be adequate," SEBI Board Member A K Batra said in his order on June 2.

SEBI had carried out an inspection of the broker's books of accounts, documents and other records in November 2000 and was also asked to furnish information regarding its market activities in the year 1999-2000 and 2000-2001.

During inspection, SEBI had observed certain violations and appointed an enquiry officer. The officer issued show-cause notice to broker on February 3, 2003 alleging that broker had committed irregularities relating to the contract notes.

The broking member failed to maintain proper segregation between members' own account and clients' accounts and in some instances, there was delay in giving deliveries to the clients, SEBI inquiry officer said.

The inquiry officer recommended suspension of JM Morgan's certificate of registration for three months.

SEBI Board Member said no prejudice was caused to any investor as a result of the irregularities that alleged to have been committed by JMM.

Under circumstances the imposition of three-month penalty would not advance the objects of the SEBI Act or any of the regulations framed there under.