SAT upholds NSE's arm move to declare Prime Broking defaulter

Dismissing Prime Broking Company's plea, Securities Appellate Tribunal (SAT) today said it could not find any fault with the decision of NSE's clearing corporation arm in declaring the broker as defaulter.
The committee of National Securities Clearing Corporation Ltd (NSCCL) in October 2013 had declared Prime Broking as defaulter for its failure to fulfil settlement obligation, and consequently the brokerage firm was also declared a defaulter in the capital market segment.
Following the committee's order, the company approached SAT.
In a ruling today, SAT said, "as the appellant (Prime Broking) failed to discharge that liability, NSCCL was obliged to discharge that liability by paying Rs 91.5 crore to third parties from its own profits and the accumulated reserves and settle the trades of the appellant. Admittedly, the appellant has failed to reimburse that amount to NSCCL till date."

"In these circumstances, no fault can be found with the decision of the Committee in declaring the appellant to be a defaulter under the Bye Laws framed by NSCCL in the F&O segment," the Tribunal noted.