Karvy declared a defaulter by NSE for misuse of clients' securities

Clients can now be paid from investor protection fund corpus

The National Stock Exchange (NSE) has declared Karvy Stock Broking a ‘defaulter’, paving the way for clients of the beleaguered broking firm to make claims with the exchange to recover their dues.

Once a trading member is decl­ared a defaulter, a stock exchange can pay the clients from the investor protection fund (IPF) kitty.

The Hyderabad-based firm is alleged to have misused securities belonging to its clients. The total default is said to be in excess of Rs 3,000 crore —making this the largest default by a broker.

However, last week, NSE settled funds and securities worth Rs 2,300 crore belonging to 235,000