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NSE revises penalty structure for unauthorised trades

Top stock exchange NSE has decided to impose a penalty of Rs 10,000 for every unauthorised trade by a trading member as identified by investor grievance redressal panel, from January 1, next year.

The amended indicative penalty structure for unauthorised trading also includes debarment of the alleged broker from taking new clients for one month, in case 25 per cent of all the complaints (not less than 10) placed before the panel in the immediately preceding calendar quarter are determined to be illicit transactions.

“Based on the representations received from members for review of the indicative penalty with respect to unauthorised trading, the exchange has amended the indicative penalty structure,” the National Stock Exchange (NSE) said in a circular on Tuesday.

“The revised measures will come into effect from January 1 onwards,” it added.

Further, under the amended rules, if the unauthorised trades persist for three consecutive quarters, the trading member concerned will be debarred from taking new clients for a period of three months.

“Beyond this, the case will be placed before the disciplinary action committee (DAC),” the exchange said.

Under the existing norms, the exchange was imposing a monetary penalty of Rs one lakh on unauthorised trades, among others as determined by investor grievance redressal panel or arbitration when there is no appeal.

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