sebi:WTM/AN/MIRSD/DOP/29850/2023-24
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Facts / Headnote
Noticee held not a 'fit and proper person' for holding certificate of registration as stock broker
Provisions invoked
- s. 19
- s. 11(4)
- s. 11B
- s. 27
- s. 12(3)
- s. 154
- s. 209A
Regulations
- Reg. 25
- Reg. 27
- Reg. 6
- Reg. 5(e)
- Reg. 9(b)
Parties
- VCK Commodity Services Pvt. Ltd.
Holding
The Noticee, by acting as an instrument in promoting and dealing in NSEL paired contracts which were financing transactions in violation of the 2007 Exemption Notification, is no longer a fit and proper person for holding the certificate of registration as a stock broker under regulation 5(e) of the Stock Brokers Regulations read with Schedule II of the Intermediaries Regulations.
Full text
Order in respect of VCK Commodity Services Pvt. Ltd. in the matter of NSEL Page 2 of 30 of (i) the aforesaid DA Report; (ii) Finance Ministry letter dated December 30, 2014 to Forwards Market Commission (hereinafter referred to as “FMC”) and (iii) Hon’ble Bombay High Court’s order in criminal bail application no. 1263 of 2014 in Jignesh Prakash Shah vs. State of Maharashtra dated August 22, 2014.
Order in respect of VCK Commodity Services Pvt. Ltd. in the matter of NSEL Page 3 of 30 (ii) Copy of FIR dated September 28, 2018 filed by SEBI under Section 154 of Criminal Procedure Code, 1973 (hereinafter referred to as “CrPC”);
Order in respect of VCK Commodity Services Pvt. Ltd. in the matter of NSEL Page 4 of 30 allowed buying and selling in same commodity through two different contracts at two different prices on the exchange platform wherein the investors could buy a short duration contract and sell a long duration contract and vice versa at the same time and at a pre-determined price. The trades for the buy contract (T+2 /T+3) and the sell contract (T+25/T+36) used to happen on NSEL on the same day at same time and at different prices, involving the same counterparties. The transactions were structured in a manner that buyer of the short duration contract always ended up making profits.
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Source: SecMarx — sebi:WTM/AN/MIRSD/DOP/29850/2023-24. 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.