Markets regulator Sebi on Friday cancelled the registration of three brokerage houses for facilitating its clients to trade on the platform of the now defunct National Spot Exchange Ltd (NSEL) in illegal ‘paired contracts’.
The brokerage houses, whose registrations were cancelled, are Paterson Commodities, Blue Crest Commodities and Fair Intermediate Products.
In three separate orders, Sebi found that these entities have either participated or facilitated the trading in ‘paired contracts’ on the NSEL platform.
By providing such a facility, they exposed their clients to the risk involved in trading in a product that did not have regulatory approval. The acts by the brokers raised doubts about their competence to act as registered securities market intermediaries, the orders noted.
As per the order, Fair Intermediate Products started trading in the alleged paired contracts in 2012 after 3 years from the date on which NSEL launched these contracts in September 2009.
Accordingly, the
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