13 Dec 2023 , 09:23 AM
Sebi suspended the registration of brokerage company Religare Commodities on Tuesday for its alleged participation in illicit paired contracts on the now-defunct National Spot Exchange Ltd (NSEL).
The brokerage exposed its clients to the danger of trading in a product that did not have regulatory permission by offering access to ‘paired contracts,’ according to Sebi’s ruling. Furthermore, the regulator stated that the noticee’s (Religare Commodities) trading actions in ‘paired contracts’ for its clients on the NSEL platform have major elements that jeopardize the noticee’s competence and integrity in the securities market.
As a result, Sebi has suspended Religare Commodities’ registration as a commodities derivative broker for three months from the date of this order, or until the FIR filed against the broking firm by EOW (Economic Offences Wing) is closed or the noticee is acquitted by a court regarding the FIR, whichever is later. The Securities and Exchange Board of India (SEBI) further stated that the orders will take effect immediately.
NSEL introduced the idea of paired contracts for trading in September 2009, allowing the purchasing and selling of the same commodity via two distinct contracts at two different prices on the exchange platform. According to the decision, the system of paired contracts traded on NSEL led investors to lose Rs 5,500 crore.
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