sebi:WTM/RKA/MIRSD/91/2016
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Facts / Headnote
Directed NSE to reconsider the applicants' complaints afresh and dispose of them within two months; directed SEBI to take steps to enforce directions against SSL and its directors.
Provisions invoked
- s. 19
- s. 446
Regulations
- Reg. 28(2)
- Reg. 27
Holding
The applicants' claims cannot be summarily rejected as 'loan transactions' and they are entitled to be considered for relief under the stock exchange's Investor Protection Fund mechanism; NSE is directed to reconsider their complaints afresh in accordance with its rules, regulations and bye-laws within two months.
Full text
Order on the application filed by Ms. Swati Mayekar & 13 Ors. Page 2 of 10 months to be refunded based on the improvement in compliance by SMC with respect to reporting of margin collected from trading members.
Order on the application filed by Ms. Swati Mayekar & 13 Ors. Page 3 of 10 iv. In February 2009, the applicants immediately issued a letter about their grievances to the Executive Directors of Investor’s Grievance call of SEBI. The copies of the same were also forwarded to BSE and NSE. v. In March 2009, by virtue of letter dated 3rd March 2009 the applicants lodged a complaint with SEBI seeking investigation of the conduct of the working of SMC. In May 2009, applicant no. 13 sent a letter to SEBI requesting for an audience with regard to the complaint against SMC and SSL. In October 2009, since SEBI did not respond, applicants filed an application under RTI seeking clarification of matters of SMC and SSL. vi. On 6th October 2009, SEBI passed an order confirming the interim directions issued against SSL as per order dated 30th January 2009. vii. Applicants vide their letter dated 23rd November 2009, issued to the Chairman of SEBI clearly recorded that without connivance of SMC it was not possible for SSL to default and hence requested for an investigation and action against the wrong doer. viii. Applicants issued a letter dated 15th December 2009, to SEBI and NSE seeking personal hearing. ix. NSE submitted the Inspection Report in the year 2009 that brought on record glaring facts with regard to the illegal conduct of SMC in their capacity as Clearing Member. x. Applicants lodged their claim with NSE. NSE rejected the same. xi. Applicants issued a letter dated 10th March, 2011
Order on the application filed by Ms. Swati Mayekar & 13 Ors. Page 4 of 10 xvii. At the instance of SEBI, applicants resubmitted their claims to NSE, which were once again summarily rejected by NSE with almost identical replies. xviii. Applicants by way of letter dated 13th May, 2013 requested SEBI for an audience and hearing before final orders could be passed by him. xix. Subsequently, the Whole Time Members, Mr. Prashant Saran of SEBI in exercise of his powers under regulations 28(2) of the SEBI (Intermediaries) Regulations, 2008 read with Section 19 of the SEBI Act, 1992 passed the Order dated August 2, 2013 prohibiting the Respondent No. 2 from taking up any new assignment for a period of three months, without giving a hearing to the applicants. xx. The appeal preferred by SMC before SAT challenging the Order was dismissed by an Order dated 31st January 2014. The findings against the SMC are confirmed. SAT also has observed the far reaching impact the SMC’s conduct can cause and the responsibility of SMC being a clearing member towards the security market and its investors. xxi. SEBI has passed an order against SSL on 23rd April, 2014. The applicants have preferred an Appeal against the said Order and the same is pending, xxii. Applicants have time and again placed their grievances against SMC and SSL before SEBI however the same remain to be resolved till date. The inspection Report as well as the Order dated 2nd August, 2013 passed by SEBI highlight glaring misconduct
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Source: SecMarx — sebi:WTM/RKA/MIRSD/91/2016. 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.