Sebi on Friday slapped a fine of Rs 17 lakh on Motilal Oswal Financial Services Ltd for "misuse of client funds" as it failed to comply with regulations on segregating funds and securities of clients.

Sebi had conducted an inspection between April 2012 to March 2014, wherein it found instances where the broker had indulged in intermingling or misuse of clients' funds.

"Instances of misutilisation of funds of the clients on 11 sample days out of the 20 sample days represent approximately 55 per cent of the sample dates selected by the inspection team," it said in an order.

In a statement, Motilal Oswal said it was in the process of examining the order and would take appropriate action.

According to Sebi, the amount of misutilisation was in the range of Rs 5.01 crore to Rs 102.06 crore for the sample dates.

"The noticee (Motilal Oswal) has failed to maintain segregation of client's funds, and further misused the clients' funds, thereby violating the provisions of the Sebi circular... Dated November 18, 1993," the order said.

As per the 1993 circular, stock brokers shall keep the money of the clients and their own money in separate accounts. Besides, no payment for transactions in which the member broker is taking a position as a principal will be allowed to be made from the client's account.

"We state that Sebi's order dated February 28, 2020 pertains to inspection of books/ records of Motilal Oswal Financial Services Ltd, for the old period from April 1, 2012 to March 31, 2014.

"We are in the process of examining the order and would take appropriate action," Motilal Oswal said in the statement.