market, it has been receiving large number of representations from various organisations including NSEL Investors Action Group, NSEL Investors Forum and also from NSEL, seeking intervention including in recovery of dues from defaulters.
market, it has been receiving large number of representations from various organisations including NSEL Investors Action Group, NSEL Investors Forum and also from NSEL, seeking intervention including in recovery of dues from defaulters.
Sebi has also been required to act against NSEL brokers for various alleged irregularities and to apply Sebi regulations on CIS and Ponzi schemes with regard to trading at NSEL.
However, Sebi has clarified its position that it has no role to play in recovery from the defaulters of NSEL and the same was being dealt with by other agencies such as EOW and ED and also a high-powered committee set up by the court.
Sebi has also informed the Committee that the recovery matters pertaining to NSEL was were beyond Sebi's regulatory domain.
On petitions seeking applicability of CIS and ponzi schemes to the NSEL trading model, Sebi observed that ponzi schemes are banned under Prize Chit and Money Circulation (Banning) Act administered by the state government.
However, on receipt of petition, it was examined by Sebi and these investor groups have been appraised that the trading on NSEL platform did not have element of CIS, the official said.
On action against brokers, Sebi looked into their role on the basis of the preliminary report of EOW which contained prima facie evidence of wrongdoings by some brokers.
Sebi set up an Internal Committee to examine the role of brokers and subsequently appointed auditors to conduct audit of books of accounts of five commodity derivative brokers whose name appeared in the interim report of EOW.
On the basis of auditors' report, Sebi initiated enquiry proceedings against these five brokers -- Anand Rathi Commodities Ltd, Geofin Comtrade Ltd, India Infoline Commodities Ltd, Motilal Oswal Commodities Brokers Pvt Ltd and Philip Commodities India Pvt Ltd.
Sebi also appointed a bench of Designated Authorities and they issued show cause notices in this matter. Besides, enquiry proceedings were initiated against the entities which are under the same management control of four brokers -- Anand Rathi Commodities Ltd, India Infoline Commodities Ltd, Motilal Oswal Commodities Brokers Pvt Ltd and Philip Commodities India Pvt Ltd.
Sebi has been attending the review meeting to oversee the action taken on recommendation of the Special Team of Secretaries on NSEL matter and has been apprising the committee of the action taken by it and the status thereon.
The regulator will also inform its board, in its meeting this Saturday, about its role in the NSEL matter.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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