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| Sebi allows Ketan Parekh conduits to close F&O positions |
| BS Reporter / Mumbai Jun 06, 2009, 00:52 IST |
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The Securities and Exchange Board of India (Sebi) today said that entities that were barred from securities trading for links with Ketan Parekh (KP) would be allowed to close their positions in the futures & options (F&O) segment.
The regulator has discovered that Ketan Parekh, who was banned from trading in the markets for 14 years in 2003, was routing money into securities through five conduits in order to repay a loan taken from Madhavpura Mercantile Co-operative Bank (MMCB). Suspecting possible links with Parekh following its investigations, the market watchdog banned 26 entities on June 4 from trading in securities.
The regulator today asked the exchanges to permit the banned entities to square off their existing open positions in the F&O segment. Exchanges have been asked to ensure that no fresh positions are created for these entities.
“As per the data presented before me, it is observed that these connected clients need to be given an opportunity to close their positions in the F&O segment created at the end of trading on June 4, 2009,” said K M Abraham, wholetime member, Sebi.
The regulator said it was necessary to place the connected clients in the squaring-off mode by closing their open positions at the earliest. Profit arising from squaring off these positions would be withheld by the National Stock Exchange (NSE) till the regulator concluded its proceedings in the case.
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