The Securities Appellate Tribunal (SAT) has quashed orders passed by stock exchange NSE and depository CDSL against Kotak Mahindra Bank in share pledging case pertaining to Arcadia Share and Stock Brokers.
Quashing the directions, the appellate tribunal said that National Stock Exchange (NSE) and Central Depository Services (India) Ltd or CDSL had no powers to issue directions to a non-trading member.
In February 2021, the NSE had directed the lender not to invoke the pledge of the securities till the ownership of the pledged securities are ascertained in the demat account of Arcadia Share and Stock Brokers.
Thereafter, CDSL imposed a debit freeze, prohibiting the lender from invoking the pledged shares and recovering its dues.Following these orders, Kotak Mahindra Bank approached the appellate tribunal.
In its order, SAT said that respondent (NSE) as a stock exchange has jurisdiction only against its trading members and cannot issue any directions to any other entity including the appellant (Kotak Mahindra Bank) who is not the trading member.
