With a merger nearing between the Securities and Exchange Board of India (Sebi) and the Forward Markets Commission (FMC), the two-year controversy at National Spot Exchange (NSEL) is gaining the spotlight once again.
“With the merger there would be amended regulations and commodity brokers would need to meet that ‘fit and proper’ criteria. If they don’t, Sebi would not be able to give them registration under our regulations,” said a senior official of the latter.
The matter is likely to be discussed at its board meeting on August 24. The market regulator is likely to finalise the bulk of the regulations concerning entities to come under its fold once the merger between the two regulatory entities is effected.
By the Sebi regulations for brokers and intermediaries, it grants a certificate of registration once the entity fits the criteria for determining a ‘fit and proper person’. Its board may take into account any consideration it deems fit, including but not limited to integrity, reputation and character of the applicant. There should be an absence of convictions and restraint orders, and the intermediary should be competent on the financial solvency and net worth criteria.
By the Sebi regulations for brokers and intermediaries, it grants a certificate of registration once the entity fits the criteria for determining a ‘fit and proper person’. Its board may take into account any consideration it deems fit, including but not limited to integrity, reputation and character of the applicant. There should be an absence of convictions and restraint orders, and the intermediary should be competent on the financial solvency and net worth criteria.
The requirement is likely to act as a hurdle for registration for NSEL's brokers, especially those against whom there have been criminal complaints. The city police’s economic offences wing (EOW) is already investigating the role of nearly 200 brokerage firms for allegedly modifying client codes illegally. NSEL claims brokers modified 300,000 client codes in only four months before the scam was exposed in 2013
Listing with MCX take our help
Due Diligence MCX
CSGAURAV +919990694230
[email protected]
https://gauravsharmaassociates.wordpress.com https://femaindiaservices.wordpress.com https://www.facebook.com/gauravdelhiravpage
Subscribe to CS GAURAV SHARMA by Email
