Emkay Global Financial Services Ltd, which is caught in the vortex of the erroneous trade entry on Friday last that caused a market maesltrom, has expressed the hope that the “obvious and apparent error” would be annulled in line with international practices.
It has clarified that its membership in NSE has not been suspended as erroneously reported in a section of the media.
In an explanation to the stock exchanges of the events as they unfolded on that day, Rajesh Sharma, Chief Operating Officer of the company, said that on October 5, while executing an order to transact a Nifty cash basket in Nifty-50, a “dealer committed a bonafide error” in entering the value of the order as the quantity of Nifty-50 basket to be transacted. It was transmitted to the NSE trading server as a single large Nifty basket order comprising Nifty 50 stocks.
Emkay stated that immediately on realising the mistake, it got in touch with the NSE and was in touch with the exchange “to co-ordinate all future course of action until the entire erroneous outstanding position was closed out”.
It said the remaining clients' outstanding positions were intact and it will “continue to service all obligations”. The company said that it was “hopeful that this obvious and apparent error would justify the annulment of these trades … which is the practice worldwide”.
Emkay said that its terminal was disabled by NSE for investigations and “primarily to prevent” any further exposure till this settlement was completed. It was working with the NSE to bring it to an expeditious closure. It clarified that its membership had not been suspended as has been “inaccurately reported in some sections of the media”. It was “adequately capitalised” to meet all financial obligations. It was confident of putting behind the incident and remained “committed to serving our stakeholders, shareholders and clients”.
The stock fell 9.98 per cent to Rs 27.95 in the NSE this morning. There were sellers for 96,468 shares in the exchange with no buyers' quotes.