sebi:QJA/SVMDR/MIRSD/DOP/25193/2022-23
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Facts / Headnote
Order passed in adjudication proceedings against the Noticee for violations of Stock Broker Regulations and Intermediaries Regulations in connection with trading in 'paired contracts' on NSEL
Provisions invoked
- s. 19
- s. 11(4)
- s. 11B
- s. 27
- s. 12(3)
- s. 154
- s. 3(2)
- s. 29A
- s. 29A(2)
Regulations
- Reg. 6
- Reg. 27
- Reg. 25
- Reg. 28
- Reg. 9
- Reg. 7
- Reg. 26
- Reg. 9(b)
- Reg. 28(1)
- Reg. 25(1)
- Reg. 5(e)
- Reg. 24(2)
- Reg. 25(3)
Parties
- Fair Intermediate Products Private Limited
Holding
The Noticee, Fair Intermediate Products Private Limited, was found to have violated Regulation 9(b) and 9(f) read with Clauses A(1), A(2) and A(5) of Schedule II of the Stock Broker Regulations and Regulation 5(e) read with Regulation 27(iv) of the Broker Regulations for failing to be a 'fit and proper person' by facilitating participation in illegal 'paired contracts' traded on NSEL. The Noticee's preliminary objections regarding jurisdiction, limitation, and the appointment of the Designated Authority were rejected.
Full text
___________________________________________________________________________ Page 2 of 28 Order in respect of Fair Intermediate Products Private Limited in the matter of trading on the National Spot Exchange Limited in delivery and that all information or returns relating to the trade as and when asked for shall be provided to the Central Government or its designated agency”.
___________________________________________________________________________ Page 3 of 28 Order in respect of Fair Intermediate Products Private Limited in the matter of trading on the National Spot Exchange Limited 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 Fair Intermediate Products Private Limited in the matter of trading on the National Spot Exchange Limited Intermediaries Regulations (as applicable at the relevant time) read with Section 12(3) of the SEBI Act for the alleged violation of the provisions of Regulation 9(b) and 9(f) read with Clauses A(1), A(2) and A(5) of Schedule II of the Stock Broker Regulations and being not a ‘fit and proper person’ for holding the certificate of registration as trading/ clearing member in terms of Regulation 5(e) read with Regulation 27(iv) of the Broker Regulations read with Schedule II of the Intermediaries Regulations. On account of failure of the Noticee to file a reply in response to the aforesaid show-cause notice dated September 25, 2018, a letter dated February 21, 2019 was issued to the Noticee advising to submit its response, if any, in the matter.
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Source: SecMarx — sebi:QJA/SVMDR/MIRSD/DOP/25193/2022-23. 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.