Business

EOW issues notices to 300 brokers in NSEL case, panic grips market

Punjab Tribune Bureau | January 30, 2019 11:08 AM

NEW DELHI: In the ongoing investigation into the working of NSEL (National Spot Exchange Limited), the Economic Offences Wing has issued notices to 300 brokers after market regulator SEBI filed an FIR against them, sources told IANS on Tuesday.

The notices allege that forward contracts on NSEL were illegal. Another authority, SFIO, has recommended similar action against 148 brokers.

Illegality was alleged in this case because NSEL was set up to trade in spot transactions and not authorised to allow trading in forwarding contracts. Spot transactions must be settled within 11 days. The paired contracts issued by NSEL and passed on by brokers to their clients went beyond the prescribed period of 11 days, sources said.

If SEBI adjudicates, as it threatens in the notice, it will declare the 300 brokers as not 'fit and proper' and they will be barred from the securities markets. This will have serious repercussions on the capital markets.

Uttam Bagri, chairman of the Bombay Stock Exchange Brokers' Forum, said: "Any across-the-board action on hundreds of intermediaries affects the entire financial ecosystem. The masterminds of the scam are attempting to divert regulatory attention by targeting brokers who are the victims themselves."

Another senior official at an industry forum said: "If SEBI stops 300 brokers from doing business, it will bring down the business. Millions of retail investors will panic and lose their money, and foreign investors will flee India."

While that may be an over-reaction, Wednesday's market hours will be interesting.

Have something to say? Post your comment
Must Read
166 beneficiaries avail facility during MGSVY camp at Rajowal village
166 beneficiaries avail facility during MGSVY camp at Rajowal village
DC directs AAI and PWD to conduct joint survey for ensuring easy access to passengers for airport from Adampur
DC directs AAI and PWD to conduct joint survey for ensuring easy access to passengers for airport from Adampur
I dare majithia to show even a single development centric work done in Dera Baba Nanak during decade long SAD rule: Randhawa
I dare majithia to show even a single development centric work done in Dera Baba Nanak during decade long SAD rule: Randhawa
AirAsia's Bhubaneswar-Bangkok service to be temporarily suspended from Sept 25
AirAsia's Bhubaneswar-Bangkok service to be temporarily suspended from Sept 25
'Bhoot Part One: The Haunted Ship' to now release in 2020
'Bhoot Part One: The Haunted Ship' to now release in 2020
Two IAS and Four PCS officers transferred
Two IAS and Four PCS officers transferred
To create awareness about new traffic rules, students to form human chain at India Gate
To create awareness about new traffic rules, students to form human chain at India Gate
Mongolian Pres, PM Modi unveils Lord Buddha statue
Mongolian Pres, PM Modi unveils Lord Buddha statue
Delhi's last elephant Laxmi sent to rehab in Haryana
Delhi's last elephant Laxmi sent to rehab in Haryana
Punjab Government transfers 11 DSP officers
Punjab Government transfers 11 DSP officers
Job fair proves boon for unemployed youth as 827 shortlisted for jobs at CT Institute
Job fair proves boon for unemployed youth as 827 shortlisted for jobs at CT Institute
High powered committee constituted by DC holds its maiden meeting
High powered committee constituted by DC holds its maiden meeting