sebi:QJA/AA/MIRSD/DOP/24211/2022-23
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Facts / Headnote
Certificate of registration cancelled - Noticee held not a fit and proper person
Provisions invoked
- s. 19
- s. 11(4)
- s. 11B
- s. 3(1)
- s. 28A
- s. 27
- s. 29
- s. 12(3)
- s. 29A
- s. 154
- s. 63
Regulations
- Reg. 6
- Reg. 27
- Reg. 9
- Reg. 23
- Reg. 7
- Reg. 9(b)
- Reg. 28
- Reg. 24
- Reg. 28(1)
- Reg. 25(1)
- Reg. 5(e)
- Reg. 2(1)(k)
Parties
- Eureka Commodity Brokerage Pvt. Ltd.
Holding
The Noticee, Eureka Commodity Brokerage Pvt. Ltd., was determined to be not a fit and proper person in terms of Regulation 5(e) of the Stock Broker Regulations read with Schedule II of the Intermediaries Regulations and its certificate of registration as Stock Broker (INZ000047901) was cancelled in the interest of the securities market.
Full text
___________________________________________________________________________ Page 2 of 42 Order in respect of Eureka Commodity Brokerage Pvt. Ltd. in the matter of trading on the National Spot Exchange Limited in exercise of powers conferred by the Section 27 of FCRA subject to certain conditions.
___________________________________________________________________________ Page 3 of 42 Order in respect of Eureka Commodity Brokerage Pvt. Ltd. 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 42 Order in respect of Eureka Commodity Brokerage Pvt. Ltd. in the matter of trading on the National Spot Exchange Limited ENQUIRY BY DESIGNATED AUTHORITY
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Source: SecMarx — sebi:QJA/AA/MIRSD/DOP/24211/2022-23. 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.