Nse Cautions Members On Off-Market Transactions

The National Stock Exchange (NSE), which is plagued with fake/forged/stolen shares problem, now faces the problem of entering such shares into the system through off-market deals.

A section of NSE members have informed the exchange that fake shares are getting into the exchange through the off-market transactions route.

Senior exchange officials said certain cases had come to their notice where the members had entered into spot transactions and in the process received fake/forged shares.

The exchange has advised its members to exercise extreme caution in accepting deliveries of scrips from members and verifying the manner in which the constituent has come to possess the scrips. The exchange is also aware of several instances where the trading members have been responsible for introducing fake shares and getting away without inquiries/penalty.

 

According to the official notice issued by NSE, Members are reportedly entering into off-market transactions. In such cases, the trading members enter into off-market spot sale transactions with buyers and deliver scrips along with an undertaking to the effect that the said shares were purchased by them from the market and that they should be considered as introducing broker.

NSE managing director, R H Patil, said severe action will be taken against members who are caught introducing fake/forged/stolen shares into the system.

The members have informed us in confidence that the several members are routing the fake shares by entering into spot sale transactions. We have cautioned our members in this regard and asked them to be very cautious while entering into spot transactions, Patil said.

Market sources revealed that several such off-market deals had taken place between the BSE and the NSE members.

In such a case, a broker or a sub-broker from one exchange sells fake shares to the member/dealer of another exchange, who is lured because he gets the scrips at a discounted price.