years. The notice states that not only were these defaults ignored, the defaulters were allowed to continue trading on the exchange. “In some instances, margin requirements were waived off to allow the defaulters to continue trading,” explained the senior official.
In two cases, the FMC found that NSEL gave a corporate guarantee to borrowers in order for them to avail of funds from private banks.
Other instances cited by the FMC in the show cause notice include the fact hat the board of NSEL was asked to set up 10 oversight committees to oversee the functioning of the exchange, however 9 of these committees never saw light of day.
The FMC's final decision on the 'fit & proper' status of the FTIL group could also have a bearing on the group's stock exchange, MCX-SX. While the Securities & Exchange Board of India (SEBI) renewed the recognition to the exchange in September for a period of one year, it had indicated that any adverse ruling from another regulator could have a bearing on it's decision to allow the group to continue operating the stock exchange