The Securities and Exchange Board of India (SEBI) has taken a decisive step by revoking the stock broking license of MMTC (Metals and Minerals Trading Corporation of India) based on recommendations from a designated authority in connection with the National Spot Exchange case.
SEBI’s directive mandates that MMTC enables its current clientele to withdraw or transfer their held securities or funds within a 15-day window. In instances where clients fail to effect withdrawals or transfers within this period, MMTC is obliged to facilitate the transfer of funds and securities to another broker as guided by the concerned clients, over the subsequent 15 days.
An investigation conducted in 2020 by the designated authority brought to light MMTC’s involvement as a stock broker on the NSEL (National Spot Exchange Limited), facilitating trades in ‘paired contracts.’ This was deemed in violation of the provisions set forth in the erstwhile Forward Contracts (Regulation) Act, 1952.
The investigation concluded that MMTC’s continued operation as a stock broker poses a threat to the securities market’s integrity and is deemed unfit to retain registration as a stock broker within the securities domain.
In response, MMTC has countered by asserting that it neither holds nor seeks registration with SEBI, thereby questioning the legitimacy of the ongoing proceedings.
