 "NSE")
The Securities Appellate Tribunal (SAT) has stayed the Rs 6 crore penalty that markets regulator Sebi had imposed on NSE for allegedly investing in firms unrelated to the stock exchange business.
Securities and Exchange Board of India (Sebi),in October, levied a fine of Rs 6 crore on National Stock Exchange (NSE) for allegedly investing in six companies unrelated or non-incidental to the stock exchange business.
The six entities are -- CAMS and Power Exchange India Ltd (PXIL), NSEIT Ltd, NSDL E-Governance Infrastructure Ltd (NEIL), Market Simplified India Ltd (MSIL) and Receivables Exchange of India Ltd (RXIL).
"The noticee (NSE) had engaged, directly and/or through its wholly-owned subsidiary NSICL, in activities that are unrelated/non-incidental to its activities as a stock exchange by way of acquisition of stakes in PXIL, CAMS, NSEIT Limited, NEIL, MSIL, and RXIL without seeking approval of Sebi," the regulator had said in its order.
Through such acts, NSE violated the provisions of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) or SECC norms, it had added.
Following this, NSE had moved SAT against the Sebi's order.
In its order passed on December 11, SAT has stayed the penalty levied by Sebi on NSE. The matter has been listed for final disposal on January 29, 2021.
According to the tribunal, one of the questions that arise for consideration is whether the appellant (NSE) as a stock exchange having made investments in six entities are related or incidental to the activities of the bourse.
Further, other questions that require consideration are whether the SECC Regulations, 2012 could be utilised for the purpose of imposing of penalty when the said Regulation has been repealed prior to the issuance of the show-cause notice and third, whether previous approval is required to be taken under the SECC Regulations, 2018, the tribunal said.
"These questions require consideration... In the meanwhile, the effect and operation of the impugned order shall remain stayed during the pendency of the appeal," it added.
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