Brokerage firm Emkay Global today said the National Stock Exchange (NSE) has rejected its application for annulment of an erroneous trade executed by one of its broker,and it is considering to challenge this decision.
The erroneous trade on October 5,2012 had led to a massive plunge of over 900 points in the NSE’s benchmark index Nifty,prompting a temporary halt in overall market trading. Emkay had to bear the losses,amounting to about Rs 51 crore,caused by this trade,but the brokerage firm later requested for annulment of the trade terming it as a one-off error.
However,a panel constituted by NSE to look into the matter has rejected Emkay’s plea,which would result in the company suffering a loss much higher than even its total market value.
“The Relevant Authority of NSE has denied our application for annulment of trades arising out of a clearly erroneous entry of sale order on October 05,2012,” Emkay Global said in a regulatory filing.
The brokerage firm said it received a communication last evening from NSE,wherein its application for annulment of trades was rejected.
The brokerage firm said it is now considering to take various legal course of action to challenge NSE’s decision.
“The company is considering various legal course of action including challenging the decision in exercise of its statutory right to appeal,” Emkay Global added.
On October 5,2012,the erroneous trade had led to a flash 900-point crash in the benchmark Nifty,halting the entire trade at NSE for about 15 minutes.
At that time,Emkay had said that “while executing an order to transact a Nifty cash basket,in Nifty-50,a dealer committed a bona fide error.
“The error was in entering the value of the order as the quantity of Nifty-50 basket to be transacted. The order got transmitted to the NSE trading server as a single large Nifty basket order comprising Nifty 50 stocks.”
“Immediately on realising the error,we promptly got in touch with the NSE and kept in touch with them to coordinate all future course of action until the entire erroneous
outstanding position was closed out,” Emkay Global had said.