Securities Appellate Tribunal Orders NSE to Accept Settlement Proposal

The Securities Appellate Tribunal directed NSE to accept a settlement proposal and release withheld payment to parties involved in trades violating SEBI/NSE norms on October 05, 2012. Despite NSE's initial rejection of the settlement proposal, the Tribunal utilized Rule 21 to mandate acceptance within two weeks. The decision clarified that this order would not impede disciplinary proceedings against the parties. The NSE order of December 04, 2014, was modified accordingly, and both appeals concluded without costs imposed.

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Issues involved:
1. Challenge to the order of the Standing Committee of NSE on annulment.
2. Dispute regarding the annulment of trades executed on October 05, 2012, due to violations of SEBI/NSE norms.
3. Rejection of settlement proposal by NSE and subsequent appeals filed by the parties.
4. Examination of NSE's power to entertain the settlement proposal.
5. Direction to NSE to accept the settlement proposal and release withheld payment.
6. Disposal of both appeals related to the annulment of trades.
7. Modification of the NSE order dated December 04, 2014.

Analysis:
1. The appellants challenged the order of the Standing Committee of NSE on annulment, which declined to take on record the settlement proposed by the parties and release payment.
2. The dispute arose from trades executed on October 05, 2012, where both parties violated SEBI/NSE norms. Emkay Global Financial Services Limited sought annulment of trades, which was initially rejected by NSE. An appeal was filed, leading to a remand directing NSE to reconsider the annulment application after hearing the concerned parties.
3. Following a fresh hearing, the settlement proposal submitted by the parties was rejected by NSE, citing a lack of power to entertain such proposals. Subsequently, the parties filed appeals challenging this decision.
4. NSE, represented by Mr. Bharucha, acknowledged that the settlement proposal did not contravene any rules/regulations/bye-laws of NSE but argued that NSE lacked the authority to accept the settlement.
5. Despite the uncertainty regarding NSE's power to accept settlements, the Securities Appellate Tribunal, utilizing Rule 21 of the Securities Appellate Tribunal (Procedure) Rules, 2000, directed NSE to accept the settlement and release the withheld payment to the parties promptly, within two weeks.
6. Both appeals concerning the annulment of trades were disposed of accordingly, clarifying that the order would not hinder the Disciplinary Action Committee's proceedings against the parties involved in the trades.
7. The NSE order of December 04, 2014, was modified as per the directions provided in the judgment, and both appeals were concluded without any costs being imposed.

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