The Securities and Exchange Board of India (Sebi) orders this week barred five broking firms from dealing in commodities declaring them as not fit and proper. Among these are Motilal Oswal Commodities, India Infoline Commodities, Anand Rathi Commodities, Geofin Comtrade and Philip Commodities India. The regulator has an ongoing investigation against another 295 forms on similar charges in the NSEL case.

More than 90 percent of contracts on the NSEL were paired contracts and all 300 brokers traded on that exchange issued paired contracts to their clients. In the normal course, this order should have created chaos and rattle the commodity derivatives market, its volumes are participation but that clearly hasn’t been the case.

Sebi, which took over the regulation of the commodity market from the forward market commission after the scam in NSEL came to light allowed the broking activities and equities and commodity derivatives to be integrated into one entity in 2017 by amending the securities contracts regulation rules.

Rajesh Baheti, president of Association of National Exchanges Members of India (ANMI) shared his views and outlook.

“At ANMI, we believe that these orders are not proper because the brokers did not have the kind of role to play in that entire scam as has made out to be. What happened is that you must understand that the exchange per se was legal or it was not governed by FMC on Sebi at that time but the exchange was definitely legal, it was set up under the consumer affairs ministry Sharad Pawar was looking after it and the entire exchange was legally set up, it had great parentage coming out of the FTIL who promoted MCX and MCX-SX. Some of the contracts that this exchange launched turned out to be illegal,” he said.