Emkay to approach NSE for annulment of erroneous orders

Emkay Global Financial Services, whose erroneous Rs 650-crore sell order in the cash market caused a massive fall of 900 points on the Nifty, the benchmark index of the National Stock Exchange, on Friday, is expected to request the exchange for annulment of its orders.

Source close to the Emkay management told Business Standard: “In the past, such errors have happened, but the brokerages concerned were not fined, nor asked to bear the cost.”

The argument of the brokerage is that in the past when such errors took place in the exchange, the orders were annualised and reversed. For instance, erroneous orders had led to a sharp fall in BSE during last Diwali. In addition, there are questions being asked about why NSE’s first circuit filter at 10 per cent did not come into force when the Nifty fell. This allowed the index to fall by another five-six per cent before the trades were closed for around 15 minutes at 9.50 am.

According to NSE sources, the brokerage has already made part-payment of the trading cost, including penalties to the exchange as a gesture of goodwill. However, it wants to plead its case for annulment.

“There have been punching errors, as well as mistakes, due to the direct market access being provided under the algo trading. However, brokerages have seldom been named or barred from trading,” said the source.