Action Against NSEL Brokers

1. ACTION AGAINST
NSEL BROKERS

2. AGENDA
 Deceitful Brokers
 Economic offences wing (EOW) Investigation
 SEBI’s actions towards Brokers
 FMC’s action against NSEL Defaulters

3. DECEITFUL BROKERS
 Engaged in mis-selling contracts of NSEL
 Suspected to have sold NSEL contract as investment
vehicles
 Around 200 brokers are alleged to have sold NSEL
products
 Some brokers also promised an assured return to trading
clients

4. EOW INVESTIGATION
 Economic Offences Wing (EOW) has been continuously
investigating the role of brokers in NSEL crisis
 Three brokerage officials were previously arrested
 Amit Rathi (MD of Anand Rathi Service)
 C.P.Krishnan (Director of Geofin Comtrade ltd)
 Chintan Modi (VP of Indian Infoline Comodities)
 Brokerage executives were arrested on charges of cheating,
forgery, criminal conspiracy & misappropriation

5. SEBI’S ACTIONS TOWARDS BROKERS
 SEBI needs additional evidence to initiate actions against
brokers
 May either need to conduct a forensic investigation
 Seek reports from EOW & CBI
 Seek a copy of the audit conducted by EOW on these brokers
 After procuring a report SEBI will examine whether brokers
violated regulations
 ‘Fit & proper’ criteria of brokers ply their trade will be
determined accordingly

6. FMC’S ACTION AGAINST NSEL DEFAULTERS
 NSEL declared 22 trading members as defaulters that failed to
pay their dues
 Forward market commission(FMC) was given the power to
recover fund
 Settlement of all outstanding one-day forward contracts at
NSEL shall be done under supervision of FMC
 FMC is authorized to take such measures, as it deems fit