sebi:QJA/MK/MIRSD/DOP/28381/2023-24
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Facts / Headnote
Noticee held not to satisfy 'fit and proper person' criteria; registration application denied / appropriate measures ordered
Provisions invoked
- s. 19
- s. 11(4)
- s. 11B
- s. 27
- s. 12(3)
- s. 154
- s. 29A
- s. 131B
- s. 14A
- s. 131
Regulations
- Reg. 7
- Reg. 28
- Reg. 27
- Reg. 5(e)
Parties
- ITL Commodities Private Limited
Holding
The Noticee, ITL Commodities Private Limited, does not satisfy the 'fit and proper person' criteria specified in Schedule II of the SEBI (Intermediaries) Regulations, 2008, and therefore its activities as a registered broker cannot be condoned, warranting appropriate measures to prevent recurrence.
Full text
Order in respect of ITL Commodities Private Limited in the matter of National Spot Exchange Limited Page 2 of 27 December 10, 2019, an opportunity of personal hearing in the matter was provided to the Noticee before the Ld. Whole Time Member of SEBI (hereinafter referred to as the “WTM”) which was availed by it.
Order in respect of ITL Commodities Private Limited in the matter of National Spot Exchange Limited Page 3 of 27 conference and made submissions on the lines of the replies submitted earlier. During the course of hearing, certain queries were raised to the Noticee and the Noticee was granted time to submit response to the said queries along with the post hearing submissions, if any. Accordingly, the Noticee vide letters dated December 27, 2022 and December 30, 2022 furnished its reply.
Order in respect of ITL Commodities Private Limited in the matter of National Spot Exchange Limited Page 4 of 27 (x) After certificate of registration issued by SEBI, the Noticee has not engaged in trading activity at NSEL and hence no question should arise on the aspect of fit and proper person. Regulations cannot be made applicable with retrospective effect. (xi) Discontinuance of business of the stock broker is a serious charge and causes irreparable damage to the reputation. (xii) The trades carried out by the Noticee has not caused harm to any other market participants. (xiii) The Noticee is not connected with NSEL or its management expect in the capacity as member of NSEL. (xiv) The allegation levied does not corroborate with the corresponding evidence in the matter. (xv) The Noticee received part payment vide special payout in terms of NSEL circular dated August 17, 2023. (xvi) The Noticee has not executed trades in paired contracts. Trades were executed as per obligation of physical market. The Noticee had also taken delivery. (xvii) The Noticee has not admitted to trading in paired contracts as stated in the enquiry report. The Noticee had submitted that, assuming that the Noticee had facilitated in trading in paired contracts, even then the Noticee cannot be held liable solely on the basis of its trading facility in paired contracts since it had not designed paired contracts. (xviii) The DA has failed to deal with all the preliminary objections raised in the Noticee
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Source: SecMarx — sebi:QJA/MK/MIRSD/DOP/28381/2023-24. 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.