NSE declares Prime Broking a defaulter

Move made in effect of the company's failure to fulfill settlement obligations

The National Stock Exchange of India has declared Prime Broking Company (India) Ltd a defaulter, according to a circular on the exchange website. 

 

“All members are hereby informed that M/s. Prime Broking Company (India) Ltd…has been declared defaulter by the relevant authority…for its failure to fulfill settlement obligation,” said the circular dated October 15.

 

The exchange had earlier disabled its terminals after it failed to meet payment obligations. The NSE had begun an investigation of the trading activity of Prime Broking and its related entities in addition to trades in the shares of jewelery giant Gitanjali Gems. It halted payment in transactions involving Prime in an announcement on June 28.

 

The exchange alongwith the Securities and Exchange Board of India then disabled 26 entities from trading in the market  in a notification dated July 18. 

The broking house had appealed against the National Stock Exchange in the Securities Appellate Tribunal over the client allegedly holding back funds belonging to the clients of the brokerage. 

 

The hearing which was scheduled for earlier in the week (October 11) was adjourned to November 11.

 

The NSE had confiscated funds of Prime’s Portfolio Management Services(PMS) division, which consists of high networth individuals. The division had 500 clients. 

 

The stock was down 2.74 % on Tuesday, closing at Rs.3.2.The stock is down 74.84 % from its 52-week high. It had hit a high of Rs.12.72 on 16th October 2012.