SAT quashes NSE order against Kotak Mahindra Bank in share pledging case

Says stock exchange only has jurisdiction over trading members and cannot issue directions to other entities

The Securities Appellate Tribunal (SAT) has quashed orders passed by the National Stock Exchange (NSE) and Central Depository Services (CDSL) directing Kotak Mahindra Bank not to invoke shares pledged by Arcadia Share & Stock Brokers.

In February 2021, the NSE had restrained the private sector lender from invoking and selling securities pledged by the brokerage until the rightful ownership of the securities was ascertained. The CDSL had then put in place a debit freeze, prohibiting Kotak Mahindra Bank from invoking the pledged shares and recovering its dues. The bank then moved SAT, challenging this.

The SAT in its order said,