 "Sebi, Securities and Exchange Board of India")
Markets regulator Sebi on Tuesday cancelled the registration of Siddhi Vinayak Commodities for facilitating its clients to trade in illegal paired contracts on the National Spot Exchange Ltd (now defunct).
The act of the noticee (Siddhi Vinayak Commodities) of executing trades in the 'paired contracts', which did not have requisite regulatory approval, raises doubts on the competence of the noticee to act as a registered securities market intermediary, Sebi said in the order.
"I hold that the noticee does not satisfy the 'fit and proper person' criteria under the norms and therefore, the continuance of the noticee as a broker will be detrimental to the interest of the securities market," Sebi's Executive Director Anand R Baiwar said in the order.
Sebi has asked the broker to allow its existing clients to withdraw or transfer their securities or funds held in its custody within 15 days.
In case of failure of any clients to withdraw or transfer their securities or funds within this period, the broker will transfer the funds and securities of such clients to another broker within a period of the next 15 days thereon, under advice to the clients.
In September 2009, NSEL introduced the concept of 'paired contracts' for trading, which allowed buying and selling of the same commodity through two different contracts at two different prices on the exchange platform.
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The scheme of 'paired contracts' traded on the NSEL had caused a huge loss to investors to the extent of Rs 5,500 crore, as per the order.
In two separate orders, Sebi slapped a fine of Rs 5 lakh each on Namita Rastogi and Navita Agarwal for indulging in non-genuine trades in the illiquid stock options segment on BSE.
The Securities and Exchange Board of India (Sebi) observed large-scale reversal of trades in the illiquid stock options segment of BSE, leading to the creation of artificial volumes on the bourse.
It conducted an investigation into the trading activities of certain entities engaged in the segment on BSE from April 2014 to September 2015.
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