SEBI cancels Aasmaa Commodities and Banka Bullion registration certificates

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Market regulator SEBI on Friday canceled registration certificates for Aasmaa Commodities Pvt Ltd and Banka Bullion Pvt Ltd for failing to meet “fit and proper” criteria by allowing their clients to trade illegal contracts on the National Spot Exchange Ltd (NSEL).

A number of entities, including the two brokers registered with Sebi as trading / clearing members, were also members of NSEL and had themselves participated in or facilitated the trading of “matched contracts” on the platform. of the NSEL markets.

This made the brokers unfit to hold registration as a stockbroker.

Under the guise of the spot commodity market, the NSEL carried out a series of financing transactions.

The system of paired contracts illegally traded on the NSEL platform inflicted a huge loss in the market in the order of 5,500 crore, SEBI noted.

Regarding Banka Bullion, SEBI stated “once the Noticee got the taste of earning assured returns from the execution of matched contracts under the guise of spot commodity trading, the Noticee continued to enter into matched transactions. Many times”.

So much so that in the end it is true that he was left hanging in a situation such that an amount of 49.47.750 of his own money was trapped in these transactions when the NSEL finally committed the default in the amount of 5,500. crore.

Maintaining the registration of brokers is detrimental to the interests of the securities market and they are no longer considered “fit and appropriate” persons to hold the registration certificate, Sebi said in two similarly worded orders.

Common investors, who have been lured into the NSEL with a promise of “assured returns” with the help of the brokers who facilitated these trades, are running from pillar to post to recoup their hard-earned money that has been locked in default settlement. said SEBI.

In September 2009, NSEL introduced the concept of ‘paired contracts’ on its platform, which involved buying and selling the same product through two different contracts at two different prices in which investors could purchase one settlement contract. short term and sell a long term contract. settlement contract and vice versa, with the same counterparty at the same time.

Such contracts were illegal ex-facie and the NSEL was in effect carrying out a financing operation ensuring a fixed rate of return under the guise of twin contracts.

A conditional exemption was granted to the provisions of the Futures (Regulation) Act 1952 for one-day futures contracts for the sale and purchase of commodities traded on the NSEL. And, the conditions put an absolute bar on short selling and stipulated that all open positions at the end of the day must result in the delivery of goods.

Through five separate orders, Sebi fined Shubham Maheshwari, Nidhi Minni, Nilu Chopra, Abhiraj M Pujara and Rajendra Kumar Surana and Sons each for 5 lakh each for engaging in non-genuine trading options. purchase of illiquid shares at ESB.

SEBI conducted an investigation of illiquid BSE stock option trading activity between April 2014 and September 2015 after observing a large-scale reversal of transactions in the call options segment of BSE. ‘BSE actions.

By engaging in such exchanges, the entities violated the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Commercial Practices) standards.


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