NSE revises penalty structure for unauthorised trades

Mumbai, Dec 26 (PTI) Top stock exchange NSE hasdecided to impose a penalty of Rs 10,000 for everyunauthorised trade by a trading member as identified byinvestor grievance redressal panel, from January 1, next year.The amended indicative penalty structure forunauthorised trading also includes debarment of the allegedbroker from taking new clients for one month, in case 25 percent of all the complaints (not less than 10) placed beforethe panel in the immediately preceding calendar quarter aredetermined to be illicit transactions."Based on the representations received from membersfor review of the indicative penalty with respect tounauthorised trading, the exchange has amended the indicativepenalty structure," the National Stock Exchange (NSE) said ina circular today."The revised measures will come into effect fromJanuary 1 onwards," it added.Further, under the amended rules, if the unauthorisedtrades persist for three consecutive quarters, the tradingmember concerned will be debarred from taking new clients fora period of three months."Beyond this, the case will be placed before thedisciplinary 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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