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SEBI fines NSE Rs 6 crore for buying stakes in CAMS, others without its approval
PrintThe Securities and Exchange Board of India (Sebi) has imposed a penalty of Rs 6 crore on National Stock Exchange (NSE) for buying stakes in unrelated businesses without its approval.
The country's largest stock exchange has invested in companies including Power Exchange India (PXIL), Computer Age Management Systems (CAMS), NSEIT, NSDL E-Governance Infrastructure (NEIL), Market Simplified India (MSIL) and Receivables Exchange of India (RXIL).
NSE holds stake between 25% and 100 % in these companies through its subsidiary NSE Strategic Investment Corporation Limited (NSICL).
“..there is a lot of policy importance attached to the provisions of regulation 41(3) of SECC 2012 as it deals with to resolve the conflict issues of MIIs( market infrastructure institutions).The compliance of this provision also provide ring fencing to the Noticee (NSE) from the challenges, such as net worth erosion due to financial losses, bankruptcy etc," said Sebi in an order on Thursday. "The importance of compliance with reg. 41(3) of SECC 2012 is further evident from the fact that any irregularity, or misconduct in other business activities, if done by the entity like Noticee, may cost it dearly and it may lead to violation of the condition of grant of recognition i.e. to be a fit and proper person."
NSE argued before Sebi that it’s investments were in activities related to stock exchange business. In the case of CAMS, NSE submitted that CAMS’ business is related and incidental to NSE’s business since NSE provides mutual fund service system (MFSS) platform to enable investors to purchase and redeem mutual fund units through NSE members on the platform.
Sebi refused to accept this argument. #casansaar (Source - SEBI, Economic Times)
The country's largest stock exchange has invested in companies including Power Exchange India (PXIL), Computer Age Management Systems (CAMS), NSEIT, NSDL E-Governance Infrastructure (NEIL), Market Simplified India (MSIL) and Receivables Exchange of India (RXIL).
NSE holds stake between 25% and 100 % in these companies through its subsidiary NSE Strategic Investment Corporation Limited (NSICL).
“..there is a lot of policy importance attached to the provisions of regulation 41(3) of SECC 2012 as it deals with to resolve the conflict issues of MIIs( market infrastructure institutions).The compliance of this provision also provide ring fencing to the Noticee (NSE) from the challenges, such as net worth erosion due to financial losses, bankruptcy etc," said Sebi in an order on Thursday. "The importance of compliance with reg. 41(3) of SECC 2012 is further evident from the fact that any irregularity, or misconduct in other business activities, if done by the entity like Noticee, may cost it dearly and it may lead to violation of the condition of grant of recognition i.e. to be a fit and proper person."
NSE argued before Sebi that it’s investments were in activities related to stock exchange business. In the case of CAMS, NSE submitted that CAMS’ business is related and incidental to NSE’s business since NSE provides mutual fund service system (MFSS) platform to enable investors to purchase and redeem mutual fund units through NSE members on the platform.
Sebi refused to accept this argument. #casansaar (Source - SEBI, Economic Times)
Category : SEBI | Comments : 0 | Hits : 363
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