Sebi clears NSE’s investment in proposed National Coal Exchange; move to formalise coal trading

Synopsis

Securities and Exchange Board of India approved National Stock Exchange of India investment in a coal exchange to enable transparent trading while revising intermediary norms removing automatic disqualification from complaints but tightening rules upon conviction and mandating timely disclosures

Securities and Exchange Board of India (Sebi) on Friday granted approval to the National Stock Exchange of India (NSE) to invest in the proposed National Coal Exchange of India Limited, marking a significant step toward formalising coal trading in the country.

The approval paves the way for setting up a structured platform for electronic spot trading of coal. NSE is expected to soon approach the Coal Controller Organization to obtain the necessary licence for establishing the exchange.

The proposed coal exchange aims to introduce standardised contracts, transparent price discovery, and efficient settlement mechanisms, benefiting a wide range of stakeholders including producers, consumers and traders.

The initiative aligns with the Government of India’s broader coal sector reforms, such as commercial mining and liberalised coal sales. Once operational, the exchange is expected to bring greater transparency, efficiency, and organisation to coal transactions, which have traditionally been fragmented.

In another development, the market regulator amended the 'fit and proper person' framework for market intermediaries, removing the automatic disqualification triggered by mere filing of criminal complaints, FIRs, or charge sheets in economic offence cases.

The changes are aimed at bringing greater procedural clarity and fairness to the regulatory process PTI reported adding that under the revised norms, the existence of a pending criminal complaint, FIR filed by Sebi, or a charge sheet relating to economic offences will no longer, by itself, lead to automatic disqualification.

However, Sebi has expanded the disqualification criteria upon conviction. In addition to offences involving moral turpitude, conviction for any economic offence or violation under securities laws will also attract disqualification, according to a notification dated April 15.

Further, initiation of winding-up proceedings will no longer be a ground for disqualification. However, an actual winding-up order will continue to attract disqualification.

Intermediaries have been mandated to inform Sebi within 15 working days of any disqualifying events involving themselves.

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