Authority: Securities and Exchange Board of India (Whole Time Members Sandip Pradhan and K.V.R. Murty)

Order Date: September 09, 2026

Case Overview

The order settles proceedings against 91 commodity brokers who participated in or facilitated client entry into paired contracts on the National Spot Exchange Limited (NSEL) platform. The case originated from NSEL's introduction of paired contracts in September 2009, which allowed simultaneous buying and selling of the same commodity through two different contracts at different prices on the same day with the same counterparties. These transactions were structured to ensure the buyer of the short duration contract always made profits.

The Forward Markets Commission (FMC), which administered the Forward Contracts (Regulation) Act, 1952, had granted NSEL an exemption from FCRA provisions in 2007 subject to conditions including no short sales and all positions resulting in delivery. After being appointed as the designated agency in 2012, FMC analyzed NSEL's trading data and found 55 contracts violated FCRA provisions and exemption conditions, specifically noting that paired contracts violated the prohibition on short sales.

Following FMC's merger with SEBI in 2015, the regulator examined the role of members who traded on NSEL's platform and initiated enquiry proceedings against 302 stock brokers. After review, no action was recommended against 129 entities, and 12 proceedings were disposed of without directions, leaving 161 brokers against whom orders were passed with directions. Various appeals were filed before the Securities Appellate Tribunal (SAT), which in its December 12, 2023 order directed SEBI to consider a settlement scheme within three months.

Final Outcome

SEBI introduced the 'NSEL Settlement Scheme, 2025' under Section 15JB of the SEBI Act, 1992 and Regulation 26 of the SEBI Settlement Regulations, 2018. The scheme was open from August 25, 2025 to February 25, 2026, during which 91 entities availed the benefit by paying specified settlement amounts and accepting voluntary debarment conditions where applicable.

The settlement amounts varied significantly among brokers:

  • Minimum settlement amount: ₹600,000 (paid by multiple brokers including Greshma Commodities, Adinath Commtrade, Proficient Commodities, etc.)
  • Maximum settlement amount: ₹5,191,686 (paid by Purvag Commodities And Derivatives Private Limited)
  • Other notable amounts: ₹3,084,228 (Emkay Commotrade), ₹2,677,292 (Globe Commodities), ₹2,017,885 (Ludhiana Commodities), ₹1,794,927 (Ashika Commodities), ₹1,539,922 (Rainbow Commodity), ₹1,094,436 (IndiaNivesh Commodities), ₹1,000,000 (Chimanlal Popatlal Commodities)

Many brokers accepted voluntary debarment conditions:

  • 6 months debarment from proprietary trading and taking new clients in commodity segment (47 brokers including Greshma Commodities, SSJ Commodities, Blue Crest Commodities, etc.)
  • 1 month debarment from proprietary trading and taking new clients in commodity segment (6 brokers including Ludhiana Commodities, Pace Commodity Brokers, etc.)
  • No debarment conditions (38 brokers including Adinath Commtrade, IndiaNivesh Commodities, Proficient Commodities, etc.)

SEBI ordered that proceedings for the violations are settled qua the 91 applicants listed in Annexure-A, and no further action will be initiated against them for these violations. However, the settlement is without prejudice to SEBI's right to take appropriate actions if any representation made by applicants is found untrue, if they breach any undertakings/waivers, or if they fail to pay any difference due on settlement terms. The settlement will be revoked if any broker is convicted for NSEL-related violations after this order.

Topics: NSEL Settlement, Commodity Brokers, Regulatory Compliance