 "emkay")
Meanwhile, it has asked the NSE and Emkay to provide details of previous cases of annulment, as well as a record of Emkay’s trading volumes in the 90 days preceding the day the trade happened.
The next hearing is scheduled for June 19.
A dealer of Emkay Global Financial Services made an error in entering the order for one of its clients on October 5 last year. The Nifty dropped by over 15 per cent, falling 900 points as a result of the mistaken order worth around Rs 650 crore.
The brokerage looked at losses of Rs 51 crore as a result of the trade.
The index bounced back when it reopened after a 15-minute halt in trading.
“The Nifty fall was apparently on account of abnormal orders resulting in multiple trades at low prices. While the exchange systems functioned normally without any glitch, the above abnormal trades caused market closure automatically due to the index circuit filter getting triggered,” said an NSE press release.
The Securities and Exchange Board of India later put in place a set of norms to prevent a recurrence, including limiting the size of orders to Rs 10 crore and more careful monitoring of available margins with brokers before orders are executed.
Meanwhile, Emkay had asked the NSE to annul these trades. The NSE set up a committee to consider the same, but it subsequently declined to reverse the trades. It sent a letter to Emkay dated April 30, 2013 informing it of the same.
Emkay acknowledged the letter and suggested that it would look to higher authorities for relief.
“The Relevant Authority of NSE has denied our application for annulment of trades arising out of a clearly erroneous entry of sale order on October 05, 2012. The company is considering various legal course of action, including challenging the decision in exercise of its statutory right to appeal,” said a notice on the stock exchange website informing its investors of the decision.
It subsequently moved the SAT against the order, which has said it would hear the matter next month.
Emkay’s stock was down 0.54 per cent to close at Rs 18.5 on BSE. It has fallen 46.37 per cent since the day of the erroneous trade.
FREAK TRADE JITTERS
- SAT has asked the NSE and Emkay to provide details of previous cases of annulment
- SAT also seeks a record of Emkay’s trading volumes in the 90 days preceding the day the freak trade happened
- Sebi has put in place a set of norms to prevent a recurrence of such trade, including limiting the size of orders to Rs 10 crore and more careful monitoring of available margins with brokers before orders are executed
- Emkay had asked the NSE to annul these trades, but the latter declined to do so
