sebi:WTM/AN/MIRSD/DOP/29884/2023-24
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Facts / Headnote
Certificate of Registration (INZ000043009) of Systematix Commodities Services Private Limited cancelled
Provisions invoked
- s. 19
- s. 11(4)
- s. 11B
- s. 27
- s. 173
- s. 12(3)
- s. 154
- s. 29A(1)
- s. 2(27)
- s. 80J
- s. 10(27)
- s. 29A(2)
- s. 209A
Regulations
- Reg. 9(f)
- Reg. 28
- Reg. 5
- Reg. 27
- Reg. 23
- Reg. 9(b)
- Reg. 25
- Reg. 26
- Reg. 28(1)
- Reg. 25(1)
- Reg. 6
- Reg. 5(e)
- Reg. 27(1)
- Reg. 19(1)
Parties
- Systematix Commodities Services Private Limited
Holding
The Whole Time Member of SEBI cancelled the Certificate of Registration of Systematix Commodities Services Private Limited, holding that it is not a 'fit and proper person' under Schedule II of the Intermediaries Regulations read with Regulation 5(e) of the Stock Brokers Regulations, and that its continuation as a registered broker would be detrimental to the interest of the securities market.
Full text
Final Order in respect of Systematix Commodities Services Private Limited in the matter of NSEL Page 2 of 35 B. SHOW CAUSE NOTICE, REPLY AND HEARING
Final Order in respect of Systematix Commodities Services Private Limited in the matter of NSEL Page 3 of 35 Supplementary SCN dated February 20, 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. EOW Final Chargesheet No. 11 filed on December 02, 2022 wherein Noticee is named.
Final Order in respect of Systematix Commodities Services Private Limited in the matter of NSEL Page 4 of 35 decision of the Hon’ble Supreme Court in the matter of Royala Corporation (P) Ltd. and Anr. v. Director of Enforcement. 7.3. DA was appointed by SEBI to enquire into the matter on September 21, 2018 whereas the complaint, FIR and EOW Chargesheet were filed subsequently. Therefore, the said complaint, FIR and EOW Chargesheet are beyond the purview of these proceedings. 7.4. Noticee has not been provided with a copy of a document demonstrating appointment of DA by the competent authority. 7.5. The SCN does not fall within the scope and purview of the Intermediaries Regulations. Noticee was not a stock broker prior to registration with SEBI, NSEL was not a stock exchange and the trades executed on NSEL were not in the nature of securities. The transactions executed by Noticee on NSEL are beyond the regulatory purview of SEBI. 7.6. Designated Member has assumed the role of Designated Authority by including fresh observations/ allegation beyond the report submitted by DA. 7.7. The Noticee was not provided with all the documents sought by it. 7.8. Noticee had carried out the transactions in accordance with bye-laws of NSEL and Noticee was a victim of the fraud carried out by NSEL. The Noticee had executed alleged ‘paired contracts’ on behalf of its clients under their instructions. SCN is silent on any provision of law to which we were required to do such a due diligence. 7.
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Source: SecMarx — sebi:WTM/AN/MIRSD/DOP/29884/2023-24. 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.