Edelweiss Custodial Services Ltd. (now Nuvama Clearing Services Ltd.)

SAT-appeal

• Alleged improper liquidation of end-clients’ securities to recover proprietary or trading-member dues, without adequate due diligence or ensuring use only for the relevant clients’ obligations.
  Appeals were dismissed and the Committee’s directions to reinstate or buy and return wrongly sold client securities were upheld. · Appellants were required to reinstate securities within 15 days, failing which equivalent value plus 5% mark-up could be blocked from available collateral.
  Appeal: Appeal Nos. 441 of 2020, 80 of 2020, 370 of 2021 and 757 of 2021; decided by SAT on 15 December 2023. The appeals challenged NCL Committee orders dated 20 October 2020, 13 February 2020, 3 May 2021 and 7 December 2021 respectively.
• Failure by clearing/professional clearing members to conduct adequate due diligence and prevent client securities from being used to meet trading members’ proprietary obligations.
  Four appeals challenging NCL Committee orders were taken up together; operative disposition is not contained in the provided text.
  Appeal: Appeal Nos. 441 of 2020, 80 of 2020, 370 of 2021 and 757 of 2021 were heard together; decision dated 15 December 2023.
• Clearing members failed due diligence and misutilised end-clients securities to meet trading members proprietary dues in contravention of SEBI circular and NCL Rules.
  Directs appellants to reinstate securities by market purchase within 15 days · On failure block amount equal to 16th day NSE closing price plus 5% mark-up from collateral with NCL
  Appeal: Appeal Nos. 441 of 2020, 80 of 2020, 370 of 2021 and 757 of 2021 before SAT; heard 10.02.2023, decided 15.12.2023
• PCM/CM failed due diligence and liquidated end-client securities pledged via trading member to meet trading member proprietary/debit obligations, in contravention of SEBI circular and NCL Rules.
  Committee directed appellants to reinstate securities by procuring from market within 15 days · Failing reinstatement, amount equivalent to value of securities as on 16th day at NSE closing price plus 5% mark-up to be blocked from available collateral with NCL
  Appeal: Appeal Nos. 441/2020, 80/2020, 370/2021, 757/2021 heard 10.02.2023, decided by SAT 15.12.2023