Sebi issues show-cause notices to 300 brokerages in NSEL case

The market regulator has asked these brokerages to file a reply, along with documentary evidence within 21 days of the notice

The Securities and Exchange Board of India (Sebi) has issued a show-cause notice to 300 brokerages whose clients lost significant money in the infamous Rs 56-billion National Spot Exchange (NSEL) scam.

Sebi’s notice alleged that these brokerages no longer meet the “fit and proper person” criteria and hence should not be allowed to continue as intermediaries.  

The regulator asked these brokerages to explain why the action recommended should not be taken against them under the prescribed provisions of Sebi (intermediaries) and Sebi (stock-brokers and sub-brokers) regulations.

Sebi’s fit and proper criteria define basic conditions that intermediaries need to fulfil in