Forward Markets Commission plans to ban brokers involved in the National Spot Exchange

(NSEL) Crisis from commodity exchanges.

OutlineFMC ReportNSEL Action Against BrokersArrested Defaulters & Brokers In NSEL CrisisAs Per Media Reports

FMC ReportThe FMC has forwarded the interim investigation report on

brokers from the Economic Offences Wing of the Mumbai police to MCX, NCDEX and NMCE for their views on banning these brokers.

Unlike the stock market regulator SEBI, the FMC does not have the powers to regulate brokers directly. Hence, it is acting through the exchanges.

NSEL has disclosed that brokers had modified over three lakh client codes just four months before the scam came to light, in 2013, and claimed that the modifications amounted to ₹2,230 crore, or nearly half the ₹5,600-crore default.

NSEL Action Against BrokersPrakash Chaturvedi, Joint Managing Director, NSEL, said the EoW

has arrested top officials of three broking firms and their remand applications talk about the malpractices indulged in by the brokers.

Along with the EOW report, NSEL also sent a copy of the NSEL letter asking to take action against five of the brokers who are also

members of other commodity exchanges. 

Arrested Defaulters & Brokers In NSEL CrisisThe police in March this year arrested key officials from Anand Rathi,

Geofin Comtrade and India Infoline Commodities, but have not yet filed a charge sheet against any broker, who are out on bail. 

The brokers' arrests followed those of NSEL Defaulters from NK Proteins, Ark Imports, etc. 

Unnamed brokers were part of the EOW's first information report filed in September 2013.

Those arrested were charged with luring clients by mis-selling, cheating, forgery, etc.

As Per Media Reports…On the delay in taking action against brokers, the FMC said that it

had requested the EOW to share a copy of the forensic audit report conducted on the brokers in September 2014

but received an interim report only this April and the same was forwarded to the exchanges in May

FMC will have to wait for police report to take action in NSEL case