sebi:WTM/AN/MIRSD/DOP/29751/2023-24
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Facts / Headnote
Suspension of certificate of registration bearing registration no. INZ000040436 for a period of three months
Provisions invoked
- s. 19
- s. 11(4)
- s. 11B
- s. 27
- s. 12(3)
- s. 154
- s. 29A(2)
- s. 209A
Regulations
- Reg. 9(f)
- Reg. 9(b)
- Reg. 27
- Reg. 6
- Reg. 5(e)
Parties
- Ludhiana Commodities Trading Services Limited
Holding
The Noticee violated Clauses A(1), A(2) and A(5) of the Code of Conduct for Stock Brokers by participating in NSEL paired contracts and is no longer a fit and proper person under regulation 5(e) of Stock Brokers Regulations read with Schedule II of Intermediaries Regulations. Its certificate of registration INZ000040436 was suspended for three months.
Full text
Final Order in respect of Ludhiana Commodities Trading Services Limited in the matter of NSEL Page 2 of 25 B. SHOW CAUSE NOTICE, REPLY AND HEARING
Final Order in respect of Ludhiana Commodities Trading Services Limited in the matter of NSEL Page 3 of 25 Supplementary SCN dated February 27, 2023 (“SSCN”) was served on the Noticee along with the following documents: 5.1. Copy of SEBI complaint dated September 24, 2018 filed with Economic Offences Wing (“EoW”); 5.2. Copy of FIR dated September 28, 2018 filed by SEBI under section 154 of Criminal Procedure Code, 1973 (“CrPC”); and 5.3. Amended Schedule II of Intermediaries Regulations.
Final Order in respect of Ludhiana Commodities Trading Services Limited in the matter of NSEL Page 4 of 25 7.7. The observations of the Hon’ble Bombay High Court in the matter of 63 Moons v, Union of India cannot be relied upon as the said judgment has been set aside in appeal by the Hon’ble Supreme Court vide its judgment dated April 30, 2019. Similarly, observations in the bail rejection order dated August 22, 2014 passed by the Hon’ble Bombay High Court in the matter of Jignesh Prakash Shah v. The State of Maharashtra cannot be relied upon as observations made in a bail order were limited to the fact as to whether the bail should be granted or not. 7.8. Noticee, which is registered with SEBI as a stock broker, is not carrying on any trading of commodities and it is only being done by sub-brokers or their clients. 7.9. Noticee had sent the email to NSEL and FMC seeking certain details and clarifications on paired contracts. 7.10. The paired contract were available on the website of NSEL and were in public domain accessible to everyone including the regulatory authorities like FMC. 7.11. There has been no complaint against Noticee and Noticee has never been found guilty of any violation relating to commodities trading market. 7.12. SCN does not provide any details relating to the allegation and it has not been shown as to how Noticee has participated or facilitated ‘pair contracts’ or how it was either in cahoots with NSEL or in cahoots with its Client. 7.13. There is a legi
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Source: SecMarx — sebi:WTM/AN/MIRSD/DOP/29751/2023-24. 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.