Fit and proper person test bars broker registration where pending criminal proceedings trigger disqualification under amended criteria.

A commodity derivatives broker registration application was rejected because the noticee did not satisfy the fit and proper person requirement under the Intermediaries Regulations and Stock Brokers Regulations. The governing Schedule II standard treated a pending criminal complaint and a pending FIR arising from SEBI's complaint as disqualifying factors under the amended criteria. Although there was no evidence that the noticee had directly facilitated paired contracts, the subsisting proceedings were sufficient to attract the disqualification and defeat the statutory eligibility test for registration. The rejection of the application was therefore upheld as consistent with the amended fit and proper person framework.

---

---

Issues: Whether the noticee satisfied the 'fit and proper person' criteria for grant of registration as a commodity derivatives broker and whether the application for registration was liable to be rejected.

Analysis: The proceeding was decided under the Intermediaries Regulations and the Stock Brokers Regulations, with the fit and proper test under Schedule II forming the governing standard. The record showed that, although there was no evidence that the noticee had directly facilitated paired contracts, the amended criteria specifically treated a pending criminal complaint and a pending FIR arising from SEBI's complaint as disqualifying factors. In view of those subsisting proceedings, the noticee incurred the relevant disqualification under the amended Schedule II and failed the statutory eligibility test for registration.

Conclusion: The noticee did not satisfy the fit and proper person criteria and the application for registration was rightly rejected.

---