The Securities Appellate Tribunal (SAT) has stayed market regulator SEBI’s fine of ₹6 crore on the National Stock Exchange (NSE) in a matter involving the exchange’s investments in “unrelated businesses”. The NSE had contended that the investments were made by it before SEBI came out with rules requiring its prior permission to invest.
SAT stayed the matter till the time NSE’s appeal was disposed of with a ruling.
The matter has been listed for final disposal on January 29, 2021. According to SAT, a question that arises 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.
According to SEBI, the NSE has violated norms by not seeking prior SEBI approval for investing in the six companies.
“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,” SEBI had said in its order.
Following this, NSE had moved SAT against SEBI's order.
According to SAT, other questions that require consideration are if the SECC Regulations, 2012 could be utilised for the purpose of imposing a penalty when the said regulation has been repealed prior to the issuance of the show-cause notice and whether previous approval is required to be taken under the SECC Regulations