Bourses direct clients of barred brokers to close positions by March

Sebi had restrained 22 trading members from the securities markets misusing stock exchange platform for tax evasion

Leading stock exchanges BSE and NSE have directed clients, having open positions in derivative segment through 22 barred trading members, to square off those positions by next month.

"Clients who have open positions in derivative segment through the 22 trading members as on close of February 17, 2016, can partially/fully roll over their near month open position (February expiry) to March month contract, wherever applicable. This needs to be done by February 25," the bourses said in similar-worded circular.

The rolled over position, if any, has to be squared up latest by March 31, they added.

Clients will not create any new position in derivative segments through these members.

However, clients are allowed to create any fresh positions through other trading members.

Markets regulator Sebi, in an interim order dated February 17, had restrained 22 trading members from the securities markets misusing stock exchange platform for tax evasion. These entities executed 'reversal trades' worth over Rs 8,100 crore to generate fictional profits or losses.

However, these trading members would be allowed to function as stock brokers on behalf of their existing clients in the cash segment. But, they cannot sign any new client.

The debarred entities included Sunstar Securities, Subh Stock Broking, Mauzampuria Securities Broking, Guiness Securities, Abans Securities, Kayan Securities, Odyssey Securities, Giriraj Stock Broking, Best Bull Stock Trading, Lalit Kumar Tulshyan and Mousumi Deb Roy.