Govt may suggest closure of MMTC over lack of investor in OFS: Report

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Also Read: Multibagger PSU stock MMTC jumps 150% in six months. Experts see more upside Earlier this year, capital markets regulator Securities and Exchange Board of India (SEBI) cancelled the registration of MMTC Ltd as a stock broker for its involvement in illegal ‘paired contracts’ in a case pertaining to now defunct National Spot Exchange Ltd (NSEL). While cancelling the licence, SEBI directed MMTC to allow its existing clients to withdraw or transfer their securities or funds held by it within 15 days.

In case a client fails to do so, the broker will transfer the funds and securities to another registered broker in the next 15 days under advice to the said clients, SEBI had said in its order. Going by the order, MMTC is a commodity derivatives broker registered with SEBI, from December 2015 and is currently a member of the Multi Commodity Exchange of India Ltd (MCX). The broker made an application in September 2019 for surrendering its membership of MCX.

However, the surrender application of MMTC is still pending with MCX. In its order, SEBI said MMTC traded in ‘paired contracts’, which did not have regulatory approval. “The noticee (MMTC) having traded in the 'paired contracts' on the NSEL, which was in violation of the conditions of the 2007 Exemption Notification and also the provisions of the Foreign Contribution Regulation Act (FCRA), seriously calls into question the integrity, honesty and lack of ethical behaviour on its part," said the regulator.