STOCK MARKET BSE NSE

NSE rejects Karvy’s licence suspension plea

Karvy’s separate petition against SEBI regarding the lack of PoA awaits fresh orders from the regulator.

Published: 10th December 2019 11:57 AM  |   Last Updated: 10th December 2019 11:57 AM   |  A+A-

Karvy Stock Broking logo

Karvy Stock Broking logo

Express News Service

HYDERABAD: In a setback to Karvy Stock Broking Ltd, the NSE’s disciplinary committee has dismissed the former’s plea to revoke its suspension of licence order.“The appeal of Karvy under rule 13 (d) has been disposed of by relevant authority of the exchange on December 6. The relevant authority upheld the order dated December 2,” according to sources.

 It may be noted that Karvy moved to the Securities Appellate Tribunal (SAT), which on last Tuesday ordered the brokerage to approach NSE’s disciplinary committee to seek revocation of the suspension order. The exchange barred Karvy for violation of rules and alleged misuse of clients’ shares worth Rs 2,300 crores.

Following NSE’s suspension from trading last Monday, all leading bourses including BSE, and MCX deactivated Karvy’s trading terminals barring the company from doing business across equity, cash, commodities and currency segments. Besides, it’s also facing other restrictions Securities and Exchange Board of India (SEBI) had imposed such as prevention of adding new clients and using its Power of Attorney (PoA) for existing clients.

Karvy’s separate petition against SEBI regarding the lack of PoA awaits fresh orders from the regulator. It means Karvy’s customers may continue facing trouble monetizing securities or even porting to another brokerage. Karvy has time till December 16 to submit its responses to SEBI. Incidentally, SEBI will also deliver its orders pertaining to the petitions filed by four lenders including ICICI Bank and Bajaj Finance by December 16.

Meanwhile, Karvy’s SAT petition against the SEBI order will be heard on December 13. The suspension of the trading license will be a big blow to Karvy, whose brokerage income will take a knock and cripple the firm’s ability to service debt payments. As on November, its consolidated debt stood at about Rs 3,000 crore.

Meanwhile, NSE on Monday cautioned investors while executing PoA with brokerages and specify all the rights they can exercise on their behalf. It also asked investors to register for online applications provided by depositories for online delivery of securities as an alternative to PoA, which is a mandatory requirement as per SEBI or the exchanges.

According to NSE, investors need to ensure that contract notes are received within 24 hours of trades and statement of account at least once a quarter from the brokers.“If investors have opted for running account, please ensure that the stockbroker settles your account regularly and in any case not later than 90 days (or 30 days if you have opted for 30 days settlement),” it said.

Restrictions by SEBI

Karvy is also facing other restrictions that SEBI had imposed such as prevention of adding new clients and using its Power of Attorney (PoA) for existing clients



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp