Tejas Khoday

Co-Founder & CEO, FYERS
I just read this post regarding NSE not paying money from it's pockets to clearing some trades - https://www.livemint.com/opinion/columns/will-the-real-sebi-please-stand-up-1564594293741.html

Why should the courts be involved in all this? The whole point of trades happening on an exchange is because of trades being guaranteed by exchange right? If IL&FS is busted, or liquidity crunch or whatever then NSE should pay.
Hi @Dhanish,

Allied Financial has allegedly committed a fraudulent activity by pledging Navjoy Emporium Emporium & Dalmia Bharat's MF units and has taken short positions in their proprietary trading account in NIFTY/Bank Nifty Derivatives. The broker made losses and upon coming to know that MF units are pledged as collateral and will be liquidated to pay the obligation, Dalmia Bharat approached SEBI which has then guided them to file a complaint with the Economic Offences Wing (EOW). As a result, EOW has directed the MF units to be blocked and IL&FS (Clearing Member of Allied) has had to provision for the obligation using the cash collaterals which are deposited with the Clearing Corporation (NCL). IL&FS has responded and has asked for the annulment (Cancellation) of trades. The Securities Appellate Tribunal (SAT) has given its opinion on the entire episode here - SAT Order.

In my understanding, the matter has to be resolved in one of the following ways:
  1. Trades have to be annulled.
  2. Trades have to be settled by NCL by way of Novation.
  3. Trades have to be settled by ISSL (Unlikely, as they have defaulted on the obligations recently).
SEBI and NSE must come together soon and resolve the matter before the faith in the markets begin to show cracks. The FIIs are already very pissed off about it as they and as many as 68 others are counterparties to the trade which is tue the tune of 300-400 Crores.
 
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Hi @Dhanish,

Allied Financial has allegedly committed a fraudulent activity by pledging Navjoy Emporium Emporium & Dalmia Bharat's MF units and has taken short positions in their proprietary trading account in NIFTY/Bank Nifty Derivatives. The broker made losses and upon coming to know that MF units are pledged as collateral and will be liquidated to pay the obligation, Dalmia Bharat approached SEBI which has then guided them to file a complaint with the Economic Offences Wing (EOW). As a result, EOW has directed the MF units to be blocked and IL&FS (Clearing Member of Allied) has had to provision for the obligation using the cash collaterals which are deposited with the Clearing Corporation (NCL). IL&FS has responded and has asked for the annulment (Cancellation) of trades. The Securities Appellate Tribunal (SAT) has given its opinion on the entire episode here - SAT Order.

In my understanding, the matter has to be resolved in one of the following ways:
  1. Trades have to be annulled.
  2. Trades have to be settled by NCL by way of Novation.
  3. Trades have to be settled by ISSL (Unlikely, as they have defaulted on the obligations recently).
SEBI and NSE must come together soon and resolve the matter before the faith in the markets begin to show cracks. The FIIs are already very pissed off about it as they and as many as 68 others are counterparties to the trade which is tue the tune of 300-400 Crores.

Thanks for the detailed post. I didn't know there was so much Gafla in Indian system. Even NSE taking too much time to resolve.. Never knew that trades can be canceled.
 

bpr

Well-Known Member
Hi @Dhanish,

Allied Financial has allegedly committed a fraudulent activity by pledging Navjoy Emporium Emporium & Dalmia Bharat's MF units and has taken short positions in their proprietary trading account in NIFTY/Bank Nifty Derivatives. The broker made losses and upon coming to know that MF units are pledged as collateral and will be liquidated to pay the obligation, Dalmia Bharat approached SEBI which has then guided them to file a complaint with the Economic Offences Wing (EOW). As a result, EOW has directed the MF units to be blocked and IL&FS (Clearing Member of Allied) has had to provision for the obligation using the cash collaterals which are deposited with the Clearing Corporation (NCL). IL&FS has responded and has asked for the annulment (Cancellation) of trades. The Securities Appellate Tribunal (SAT) has given its opinion on the entire episode here - SAT Order.

In my understanding, the matter has to be resolved in one of the following ways:
  1. Trades have to be annulled.
  2. Trades have to be settled by NCL by way of Novation.
  3. Trades have to be settled by ISSL (Unlikely, as they have defaulted on the obligations recently).
SEBI and NSE must come together soon and resolve the matter before the faith in the markets begin to show cracks. The FIIs are already very pissed off about it as they and as many as 68 others are counterparties to the trade which is tue the tune of 300-400 Crores.
"1" is not an option. Only in India somebody can do fraud and then request trade to be annuled. This is laughable. Should have been resolved by now. The counterparty should be paid intrest. SEBI BIG FAIL
 

Tejas Khoday

Co-Founder & CEO, FYERS
"1" is not an option. Only in India somebody can do fraud and then request trade to be annuled. This is laughable. Should have been resolved by now. The counterparty should be paid intrest. SEBI BIG FAIL
Ideally, the trades should be settled. But ISSL is fighting over it and SAT has confirmed that they have all the right to appeal for the annulment of trades. In the meantime, the bye-laws of the exchange have a provision in which the fraudulent activities can be reported and as a result, trades can be annulled if the authorities are okay with it.
 
"1" is not an option. Only in India somebody can do fraud and then request trade to be annuled. This is laughable. Should have been resolved by now. The counterparty should be paid intrest. SEBI BIG FAIL
Ideally, the trades should be settled. But ISSL is fighting over it and SAT has confirmed that they have all the right to appeal for the annulment of trades. In the meantime, the bye-laws of the exchange have a provision in which the fraudulent activities can be reported and as a result, trades can be annulled if the authorities are okay with it.
Big fishes committed financial frauds, which were reported, investigated and established as fact.

Now, just because they are real, resourceful and obviously well-connected big fishes with deep pockets to oblige, trades which were ordered through the proper system can be annulled?

God save the smaller and smallest market participants.

Chowkidar listening?
 
I am only trading intraday on your platform with my Upstox DP id. I would like to open an demat account under you if you start your own dp services.

One question to you, I would like to know how many times I can avail your 30 day challenge? Like if I won one time can I joined for the second time and get the refund of my brokerages?
 

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