InvestorQ : What happens now that Karvy has been expelled by the NSE from broking membership?
indhumathi Sayani made post

What happens now that Karvy has been expelled by the NSE from broking membership?

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8 months ago
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Frankly, a lot of things are still very unclear and we must await the clarification from the NSE and BSE over the next few days. On 24 November, Hyderabad based Karvy Stock Broking was declared an exchange defaulter officially expelled from the NSE.

That deactivates its membership a full one year after the terminals of Karvy had bene shutdown by the stock exchanges. That virtually brings an end to Karvy’s tryst with stock broking activity and could deeply impact its distribution and its DP business also.

It may be recollected that the scam first broke in November 2019 after which Karvy’s terminals had been frozen for the last 1 year. This was after they were found guilty of unauthorized pledging of client shares and in some cases transferred to group units.

This was done through the misuse of POA or the power of attorney. Having been declared a defaulter, now exchanges and SEBI can fall back upon the IPF to pay proportionate dues to Karvy clients. Now Karvy could face a slew of legal cases from clients and even the banks and NBFCs that lent to Karvy.

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