NSE expels Karvy Stock Broking, scraps membership

The National Stock Exchange of India (NSE) has scrapped Karvy Stock Broking membership and declared it a defaulter.

In a media release on November 23, NSE announced the expulsion of Karvy Stock Broking from the membership of the exchange "under Rules 1 and 2 of Chapter IV of the NSEIL Rules and also declared it as a defaulter under provision 1 (a) of Chapter XII of Exchange bye laws".

Last week, NSE had said funds and securities worth Rs 2,300 crore belonging to about 2.35 lakh investors of Karvy Stock Broking Ltd had been settled so far.

The case pertains to Karvy unauthorisedly transferring securities of clients into one of its Demat accounts by misusing the PoAs (power of attorney) given by its clients.

The watchdog, in November 2019, had barred Karvy from taking new clients after it was found that the brokerage firm had allegedly misused clients' securities to the tune of more than Rs 2,000 crore.

The firm misused client collateral for its own trades. Besides, Karvy was disabled (trading rights withdrawn) by the National Stock Exchange (NSE) in December 2019.