NSE lays framework for action against brokers for misuse of clients funds
The National Stock Exchange (NSE) on Wednesday came out with a framework for taking immediate actions against trading members in case of misuse of client funds by them.
In the recent past, the exchange has observed instances of misuse of client funds during its inspections as well as in the alerts generated under offsite supervision.
In order to initiate immediate actions in critical cases where misuse of client funds is observed, the exchange said that proprietary deposits of the trading member available with the clearing house, NSE Clearing Ltd (NCL), will be blocked to the extent of the misuse amount or Rs 10 crore, whichever is lower, according to a circular.
The action will be taken for violating "principles of enhanced supervision" for stock brokers in case of misuse of clients funds.
In case misuse is observed with regards to "principles of enhanced supervision" for stock brokers, NSE said the amount equivalent to the aggregate amount of all principles, will be ...