The Securities and Exchange Board of India (Sebi) today suspended registration certificates of 578 defaulting brokers for six months or till the time they paid their outstanding registration fees to the capital market regulator.
According to sources the registration fees from these brokers would run into hundreds of crores as they have been defaulting for several years now. In August 2005, the regulator had appointed officers to conduct investigations against those 578 brokers who had defaulted in the payment of registration fees and directed the stock exchanges too for a probe into the matter.
A person familiar with the development informed that in some of the cases there is no chance of any recovery of money as most of them are extremely small brokers and out of these some have even shut their shops. This includes defaulters from various states like Ahmedabad, Banglore, Bhubaneshwar, Calcutta, Coimbatore, Delhi, Gauhati, Madhya Pradesh, Madras and Pune.
All most all the stock brokers of the Inter-Connected Exchange (ICE) and Over the Counter Exchange of India (OTCI) have defaulted. There is absolutely no trading activity on both the exchanges, which were created mainly for small and medium enterprises.
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