FMC introduces penalty on brokers carrying illegal trade

The regulator has announced a uniform penalty structure for all the commodity exchanges, while raising the penalty amount for various other offences

In order to curb illegal trading in commodity markets, regulator Forward Markets Commission (FMC) has asked exchanges to impose a penalty of Rs1 lakh-Rs5 lakh, with effect from 1st April, on brokers carrying unauthorised trading activities.

Besides introducing a penalty for illegal trading, the Forward Markets Commission (FMC) has announced a uniform penalty structure for all the commodity exchanges, while raising the penalty amount for various other offences.

“Interest of market participants will be served better only if exchanges implement the uniform penalty structure in its true spirit,” a senior official from FMC told PTI.

“As there was no structured penalty for illegal trading, we have asked the commodity exchanges to levy a penalty of a minimum of Rs1 lakh and a maximum of Rs5 lakh on their members (brokers) involved in unauthorised trading,” he added.

The penalty for illegal trading, which is also part of a common penalty structure, will be effective from 1st April.

FMC has come out with the uniform penalty structure after it found during audits that national commodity exchanges were imposing different penalties for the same offence committed by brokers. It was also observed that for a few offences, exchanges were imposing a very low penalty.

Currently, for instance, MCX is levying Rs10,000 per client as penalty on brokers (members) who are issuing more than one identity code to a client, while NCDEX and NMCE do not have any penalty in place for the same offence.

However from 1st April, exchanges have been asked to impose Rs10,000 per client as penalty on members for issuing more than one identity code, the regulator said.

Similarly, the penalty on brokers, who are using one client’s fund for trading in another client’s account, has been kept uniform at Rs25,000, against the current penalty range of Rs10,000 to Rs50,000 by various bourses, it said.

The penalty for 'non-maintenance of client code' and 'know your customer norms' has been kept at Rs10,000 per client, respectively, it added.

“The penalty provisions have been changed keeping in mind that penalties should be adequate to act as a deterrent and should be uniform across exchanges so as to rule out the possibility of regulatory arbitrage,” the FMC official said.

At present, there are four national level and 19 regional level exchanges. The turnover of these exchanges stood at Rs73,50,974 crore till 15th February in 2009-10, up by 50% from the same period last year.

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COMMENTS

rajesh agrawal

5 years ago

i m searching a dabba broker of mcx please contact me at 8858403640 rajesh agrawal

LAKHWINDER SINGH

6 years ago

In SAMANA , Distt PATIALA (PB.)-147101 one TICKET HOLDER of MCX name AGGARWAL COMTRADE LTD do dabba trading & run away & cheat the people who trusted him it takes crores of rupee of clients.normal client doesn't know that dabba trading is an punishable ofence for both broker & the client.why not MCX cancel him ticket & give advertisement on news paper so people don't trade on such brokers.

LAKHWINDER SINGH

6 years ago

In SAMANA , Distt PATIALA (PB.) one franchise broker of ANGEL BROKING (AGGARWAL COMTRADE LTD,) do dabba trading & run away & cheat the people who trusted him it takes crores of rupee of clients.normal client doesn't know that dabba trading is an punishable ofence for both broker & the client.why not NSE give advertisement on news paper so people don't trade on such brokers.

vaibhav

6 years ago

mb-9528396721,in bareilly one franchise broker do dabba trading & run away & cheat the people who trusted him it takes crores of rupee of clients.normal client doesn't know that dabba trading is an punishable ofence for both broker & the client.why not mcx give advertisement on news paper so people don't trade on such brokers.

vaibhav

6 years ago

mb-9528396721,in bareilly one franchise broker do dabba trading & run away & cheat the people who trusted him it takes crores of rupee of clients.normal client doesn't know that dabba trading is an punishable ofence for both broker & the client.why not mcx give advertisement on news paper so people don't trade on such brokers.

RBS appoints Leena Gidwani as market head for Western India

In her new position, Ms Gidwani will be responsible for business development and brand positioning

The Royal Bank of Scotland Group (RBS) has appointed Leena Gidwani as market head, Western Region, for its private banking business in India, reports PTI.

Ms Gidwani will be based in Mumbai, overseeing a team of 15 staff comprising private bankers and client-relationship associates, a statement issued by the Bank here said.

She will be responsible for driving business development, delivering the strategic growth plan and positioning the brand in the market. She will report to Shiv Gupta, head of RBS private banking business in India, it further said.

“Leena’s appointment is an important step forward for the business as we implement our strategic plan in India with a view to significantly growing our staff base and assets under management (AUM) over the next four to five years,” Mr Gupta said.

"The western region, with Leena's stewardship, will feature heavily in our plans to grow overall country AUM by 30% over this period,” Mr Gupta said.

The western region currently accounts for 40% of overall AUM of the RBS private banking business in India, the release said.

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Standard Chartered to float first IDRs for over Rs2,200 crore

The Bank plans to float 220 million IDRs; looks at listing by June

In what would be the first case of an MNC raising capital from India, UK’s Standard Chartered has announced that it would float Indian Depository Receipts (IDRs) to mop up over $500 million (Rs 2,250 crore) and list the same on bourses by June.

Seeking to float 220 million IDRs, the UK-based banking major moved market regulator SEBI for approval of the scheme, guidelines for which were cleared way back in 2004. The bank had earlier said that the issue size could be between $500 million and $750 million.

“We have a strong presence in India. We are the oldest foreign bank in the country. We have good business and IDR is to give opportunity to Indian investors to participate in the global story,” Standard Chartered PLC's CEO (India and South Asia) Neeraj Swaroop told PTI immediately after filing for the IDR with SEBI.

Standard Chartered began its Indian operations in April 1858 in Calcutta (now Kolkata).

Asked about the pricing of the instrument, he said that at present Standard Chartered PLC was being traded at £17 a share but “we have not decided on the conversion rate.”

While the banking major is looking at mopping up at least $500 million, it has not fixed any upper limit, Mr Swaroop said, adding that he would also want the employees to participate in the issue.

The proceeds would be repatriated to the global entity for normal business activities and there was no shortage of capital adequacy.

“We have not faced any shortage of capital in the past. We will not face (the same in the future). India can get capital if required,” he said.

He, however, said that no decision had been taken for fixing a quota for employees and it would be decided when the issue nears completion and would depend on a host of issues like retail response.

Asserting that India, which contributes to 20% of global profits, would continue to be the focus area, he said that this year the bank would enter a host of specialised corporate equity services to assist IPOs, brokerage and equity solutions to the Indian industry.

He said that the organisation had posted a significant $1-billion profit in 2009 and added that the outlook was good.

Mr Swaroop, however, refrained from giving any numbers for the future but pointed out that profits for the last five years had been growing at an average of 41%, while income was rising at an average of 30%.
“The principal rationale for listing is brand-building and business development in India, the Bank’s second largest market. It accounts for 20.5% of group profits,” the bank said in a statement.

The Bank has over 94 branches in 37 cities in the country. Its retail customer base stands at around 20 lakh.

Investment bankers including Goldman Sachs, UBS, JM, SBI Capital and DSP Merrill Lynch advised Standard Chartered on the said issue.

In November last year, Standard Chartered global CEO Peter Sands said that the proposed IDR issue would enhance the lenders’ commitment to the local market.

The Bank has operations in an array of verticals, including consumer and wholesale banking, private banking and SME banking.

IDRs work like Global Depository Receipts or American Depository Receipts—foreign-listed securities against underlying equity shares of Indian companies—through which Indian companies raise resources overseas.

SEBI guidelines for IDR issues permit only the companies listed in their domestic markets for at least three years and have been profitable for three of the preceding five years.
 

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