National Stock Exchange of India (NSE) has scrapped membership of Karvy Stock Broking and declared it as a defaulter.
"All members are hereby informed that the Karvy Stock Broking has been expelled from the membership of the Exchange under Rules 1 and 2 of Chapter IV of the NSEIL Rules and has been declared as defaulter under provision 1 (a) of Chapter XII of Exchange Bye laws w.e.f. November 23, 2020, after close of market hours," NSE said in a statement.
In November 2019, Karvy had transferred securities worth Rs 2,300 crore into its account by misusing power of attorney given by its clients. Subsequently, market regulator Sebi barred Karvy from taking new clients.
The firm had misused client collateral for its own trades. Karvy was also disabled (trading rights withdrawn) by the National Stock Exchange (NSE) in December 2019.
On February 25 this year, market regulator Sebi banned the transfer of clients' securities to the demat accounts of trading and clearing members to prevent any Karvy like malpractice, which could hurt the interest of investors.