sebi:SO/SBM/KL/2021-22/6462

SEBI · SEBI · 2021-03-26 · Suresh B. Menon, Adjudicating Officer

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Facts / Headnote

Adjudication proceedings initiated against NSEIL vide SCN ref.no. SEBI/EAD1/SBM/KL/7165/2021 dated March 26, 2021 disposed of pursuant to settlement on payment of Rs. 4,87,50,000/-

Provisions invoked

• s. 15J
• s. 23J

Regulations

• Reg. 25
• Reg. 28
• Reg. 23

Parties

• National Stock Exchange of India Limited

Holding

The adjudication proceedings initiated against NSEIL by the SCN dated March 26, 2021 were disposed of pursuant to a settlement, without NSEIL admitting or denying the findings of fact and conclusions of law, on payment of Rs. 4,87,50,000/- towards settlement charges.

Full text

Settlement Order in respect of NSEIL Page 2 of 4 committed by NSEIL. 3. In this regard, a Show Cause Notice ref.no. SCN/SEBI/EAD1/SBM/KL/7165/2021 dated March 26, 2021 (hereinafter referred to as ‘SCN’) was issued to NSEIL. Briefly, the following major observations/allegations were leveled against NSEIL in the SCN: a) It is observed that NSEIL has been providing services of STP centralized hub as specified in the STP guidelines. In this regard, vide SEBI email dated October 28, 2020, NSEIL was advised to provide copies of initial approval and all subsequent renewal of approvals granted by SEBI till date for acting as an STP Centralized Hub. However, it is observed that NSEIL failed to comply with the same. In view of the above it is alleged that NSEIL has not obtained renewal of approval from SEBI as per STP Guidelines. b) Further, it is noted that National Securities Depositories Limited (NSDL) and NSEIT limited (NSEIT) were acting as STP service providers in the securities market. However, on reviewing the compliance with STP Guidelines by NSDL and NSEIT (hereinafter collectively referred to as ‘STP service providers’), it is observed that these two entities had also acted as STP service providers without obtaining renewal of approval from SEBI. c) It is noted that being an STP centralized hub and by providing Centralized Hub Services to STP Service Providers, NSEIL was required to ensure that the STP Service Providers are having valid approval for continuing to act as STP

Settlement Order in respect of NSEIL Page 3 of 4 Eighty-Seven Lakhs and Fifty Thousand only) towards settlement charges. The settlement terms were placed before the High Powered Advisory Committee (hereinafter referred to as ‘HPAC’) on November 09, 2021. The HPAC, after considering the facts and circumstances of the case, the proposed settlement terms offered by the applicant and also the material made available before it by SEBI, recommended that the aforesaid adjudication proceedings initiated against the applicant may be settled on payment Rs. 4,87,50,000/- (Rupees Four Crores Eighty- Seven Lakhs and Fifty Thousand only) towards the settlement terms. The Panel of Whole Time Members of SEBI approved the said recommendation of HPAC on November 22, 2021 and the same was communicated to the applicant vide email dated November 29, 2021. Subsequently, the applicant has remitted the amount of Rs. 4,87,50,000/- (Rupees Four Crores Eighty-Seven Lakhs and Fifty Thousand only) through online payment on December 03, 2021 (transaction ref no. HDFCR52021120381472349) towards the settlement terms in the matter.

Settlement Order in respect of NSEIL Page 4 of 4 9. In terms of Regulation 25 of the Settlement Regulations, copies of this order are sent to the applicant viz National Stock Exchange of India Limited and also to the Securities and Exchange Board of India.

Source: SecMarx — sebi:SO/SBM/KL/2021-22/6462. 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.