sebi:SEBI/WTM/SR/MIRSD-NRO/29/04/2017
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Facts / Headnote
Complaint disposed of without any directions
Provisions invoked
- s. 19
Regulations
- Reg. 15
Holding
SEBI (Whole Time Member) disposed of the complaint filed by Jaswinder Singh Kapoor against LSCSL and LSACL regarding suspension of trading rights and termination of sub-brokership, holding that it is not proper for SEBI to intervene in a private dispute between a broker and its sub-broker where an arbitration mechanism is already provided by the Stock Exchange under its Bye-laws/Regulations.
Full text
Page 2 of 19 LSACLdeclared LSCSLasits functional subsidiary,which sought corporate membership of the National Stock Exchange of India Limited (“NSE”) and the BSE Limited (“BSE”) to provide trading facilities to all members of the Ludhiana Stock Exchange Ltd. Accordingly, the members of erstwhile Ludhiana Stock Exchange Ltd. (now LSACL) including Jaswinder Kapoor (M/s D.S. Kapoor & Co.) are now their sub brokers and registered with SEBI for trading on NSE/ BSE platforms.
Page 3 of 19 in illegal activities including Dabba Trading , Profit giving & bogus billing. The fact has been brought to the notice of general public by the press, as on some business premises, surveys were conducted, this fact was reported in the Press and not confronted by the Stock exchange that there was long term profit, which is surrendered by them, • LSACLhas illegally suspended my trading rights and my trading terminal was deactivated by the stock broker - LSCSL, • That M/s. Ludhiana Stock Exchange Limited (now LSACL) has no right to suspend my trading rights, as it is not a Stock Exchange, therefore letter is totally illegal, biased & un-enforceable under the law. Moreover, the Stock Exchange building belong to the Members of the Company, as there is lessor & lessee relationship between the Company & the persons sitting in the rooms. Moreover, I am a shareholder of the Company. My entry cannot be barred in the registered office of the Company, as shareholder & Investor and a Sub Broker. I have full right to enter into any Chamber & the action is totally illegal, • That my suspension of trading for a period of six months and suspension of Trading Terminal with immediate effect by LSCSLis also illegal, violation of fundamental rights, enshrined under Constitution of India, as they have snatched my bread & butter and forced me not to do the profession, as per my own choice and this company has no right to suspend any person from trading, • In light of the above, it is h
Page 4 of 19 ii. The said complaint was considered by the Board of Directors of LSACL(Holding Company) and LSCSL in their meetings held on 7.10.2015 and 12.10.2015, respectively. It was decided in the said meeting to suspend the trading rights and to deactivate his trading terminals for a period of 6 months, iii. The act of suspension of trading right of Jaswinder Kapoor by the Board of Directors of LSCSL was legal, valid and binding on him since it was within the rights of LSCSL whether to continue business with any Broker/ Authorised Person or not, iv. Before taking the decision with regard to suspension of Trading and deactivation of Trading terminals of Jaswinder Kapoor, he was provided opportunities by LSCSL vide its letters dated 29.09.2015 and 01.10.2015 for making
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Source: SecMarx — sebi:SEBI/WTM/SR/MIRSD-NRO/29/04/2017. 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.