Sebi cancels 2 commodity broker licenses

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TNN
Mumbai: Market regulator Sebi deregistered two commodity brokers, Join Commodities and Pragya Commodities, for their role in the 2013 NSEL scam. Certificate was revoked as these brokers did not meet its criteria “Fit & proper”. Industry experts said several other commodity brokers have also received similar show cause notices and may lead to such actions. Since Sebi is also the regulator of the stock market, any brokers deemed unfit to be commodity brokers could also have their securities brokerage licenses canceled, industry players said.
In the two orders against the commodities market brokers, Sebi said that Joining Commodities and Pragya Commodities engaged in trading practices on the NSEL platform that were not authorized by the government and the Markets Commission. futures (FMC), then regulator of the commodity trading segment. . The NSEL scam came to light in August 2013, and two years later FMC merged with Sebi. Since the scam came to light, trading on NSEL has been halted by the government.
Industry sources said they were aware of several show cause notices from Sebi to commodity brokers alleging similar violations, such as in the case of Join Commodities and Pragya Commodities. Several big players have also received notices. “If Sebi places similar orders, some of the major stockbrokers could also be shut down,” a source said.
A pan-Indian commodity brokerage organization has already pushed Sebi to come up with a consent mechanism to deal with these cases. However, the regulator has not yet accepted such requests. Under Sebi’s consent mechanism, the entity that received a show cause notice may prefer to pay a fine to settle the case by admitting or denying fault.

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