sebi:QJA/AA/MIRSD/DOP/23390/2022-23
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Facts / Headnote
Certificate of Registration (INZ000051827) of Quadeye Trading cancelled with immediate effect; Noticee directed to allow existing clients to withdraw/transfer securities or funds within 15 days, and transfer remaining to another broker within a further 15 days.
Provisions invoked
- s. 19
- s. 11(4)
- s. 11B
- s. 27
- s. 12(3)
- s. 154
Regulations
- Reg. 6
- Reg. 27
- Reg. 9
- Reg. 7
- Reg. 9(b)
- Reg. 28
- Reg. 28(1)
- Reg. 25(1)
- Reg. 5(e)
Parties
- Quadeye Trading
Holding
SEBI held that Quadeye Trading was not a 'fit and proper person' under Regulation 5(e) read with Regulation 27(iv) of the Stock Broker Regulations read with Schedule II of the Intermediaries Regulations, and accordingly cancelled its Certificate of Registration (INZ000051827) as a commodity derivatives broker.
Full text
___________________________________________________________________________ Page 2 of 28 Order in respect of Quadeye Trading in the matter of trading on the National Spot Exchange Limited
___________________________________________________________________________ Page 3 of 28 Order in respect of Quadeye Trading in the matter of trading on the National Spot Exchange Limited a. Short Sale NSEL had not made it mandatory for the seller to deposit goods in its warehouse before taking a sell position. Hence, the condition of “no short sale by members of the NSEL shall be allowed” was not being met by the NSEL and its trading/clearing members who traded in the paired contracts during the relevant period. b. Contracts with Settlement Period going beyond 11 days Some of the contracts offered for trade on NSEL had settlement periods exceeding 11 days and therefore, such contracts were “non-transferable specific delivery” contracts under the FCRA. As per the FCRA, the “ready delivery contracts” were required to be settled within 11 days of the trade and hence, the contracts traded on the NSEL which provided settlement schedule for a period exceeding 11 days were not allowed under the aforesaid Notification.
___________________________________________________________________________ Page 4 of 28 Order in respect of Quadeye Trading in the matter of trading on the National Spot Exchange Limited Regulation 27(iv) of the Stock Broker Regulations read with Schedule II of the Intermediaries Regulations.
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Source: SecMarx — sebi:QJA/AA/MIRSD/DOP/23390/2022-23. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.