Order in the matter of Anugrah Stock and Broking Pvt. Ltd
- Order No.WTM/KMA/67/04/2009
Ratio decidendi
The rule this decision rests on
The regulator may modify an interim prohibition on a stock broker's dealing, under ss. 11, 11B and 11(4) of the SEBI Act, 1992, so as to permit the stock exchanges to square off existing open client positions in the F&O segment, so that investors trading through the broker are not prejudicially affected, while barring any fresh positions or any increase in open positions. That relief is confined to open client positions. It does not extend to the open client positions of restrained persons or entities, nor to the broker's own proprietary positions, which remain subject to the prohibition.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Vide the Order dated May 22, 2009, Anugrah Stock & Broking Pvt. Ltd. Member, BSE (SEBI Reg. No.INB011185635 & INF011185635) and member, NSE (SEBI Reg. No. INB231185639, INF231185639 & INE231185639) (herinafter referred to as “stock broker”) is prohibited from buying, selling or dealing in securities in any manner whatsoever with immediate effect until further orders.
2. NSE on May 23, 2009, inter alia, has represented that the clients of the stock broker need to be given an opportunity to close their positions that are open. It has therefore requested to put the stock broker in square off mode wherein he would be in a position to only bring down the existing open positions by closing the position. However, he may not be allowed to take fresh positions or increase the open position.
3. I have carefully examined the request of NSE. In order to ensure that the interest of the investors who are trading through the stock broker Anugrah Stock & Broking Pvt. Ltd. are not prejudicially affected, the operative portion of the order needs to be modified.
4. In view of the above, in exercise of powers conferred under Sections 11, 11B and 11(4) of the SEBI Act, 1992, the concerned stock exchanges are hereby permitted to square off existing open client positions in F&O segment of the stock broker but, no fresh position would be permitted. It is clarified that the permission to square off the existing client open positions in F&O segment does not apply to the open client positions of restrained persons/ entities and the stock broker’s open proprietary positions.
5. The remaining part of the order dated May 22, 2009 remains unchanged.
6. This order shall come into force with immediate effect.
DR.K.M. ABRAHAM PLACE: MUMBAI WHOLE TIME MEMBER DATE: MAY 23, 2009 SECURITIES AND EXCHANGE BOARD OF INDIA
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