Mumbai: In a rare move, stock exchanges' clearing corporations have withheld fund payouts worth ₹78 crore after a police complaint filed by an investor alleged unauthorised equity derivative trades in the client's demat account, said people aware of the matter. The settlement freeze has impacted over 3,000 clients across 160 brokers, they said.
"The withholding of payouts has been carried out in accordance with the joint MII SOP (Market Infrastructure Institutions Standard Operating Procedure), which applies in cases involving directions from police or other enforcement authorities," said one of the people.
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Of the ₹78 crore held back, NSE Clearing (NCL) accounted for ₹72 crore, while ₹6 crore was withheld by BSE's Indian Clearing Corporation (ICCL).
Email queries sent to NSE and BSE elicited no response until press time.
According to broking industry officials, such freezes happen in the cash market segment but it's unusual in derivatives. "Our clients who are impacted by this freeze are awaiting resolution by the exchange," said one of the broking officials.
In the complaint, these alleged trades were done in Nifty options on May 5-when the weekly contracts expired, said one of the persons.
National Stock Exchange put on hold the payouts after the police on May 5 informed the bourse it received complaint accusing unlawful trading activity in a client's demat account.
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In its circular issued on May 6, NSE said, "The Exchange has been advised to stop all fraudulent transactions/activities executed in the trading account of the complainant on May 05, 2026, till further instructions. Accordingly, the funds payout w.r.t certain client(s) who were counterparties for the said trades in certain contracts in Equity derivatives segment have been withheld."
The exchange did not disclose the identity of the broker and client in the circular.
Exchanges will release the funds for payout following instructions from the police authorities, said one of the people in the know.
"The withholding of payouts has been carried out in accordance with the joint MII SOP (Market Infrastructure Institutions Standard Operating Procedure), which applies in cases involving directions from police or other enforcement authorities," said one of the people.
Also Read: Did BSE really overtake NSE in F&O turnover? Here's why the math may be misleading
Of the ₹78 crore held back, NSE Clearing (NCL) accounted for ₹72 crore, while ₹6 crore was withheld by BSE's Indian Clearing Corporation (ICCL).
Email queries sent to NSE and BSE elicited no response until press time.
According to broking industry officials, such freezes happen in the cash market segment but it's unusual in derivatives. "Our clients who are impacted by this freeze are awaiting resolution by the exchange," said one of the broking officials.
In the complaint, these alleged trades were done in Nifty options on May 5-when the weekly contracts expired, said one of the persons.
National Stock Exchange put on hold the payouts after the police on May 5 informed the bourse it received complaint accusing unlawful trading activity in a client's demat account.
Also Read: Explained: What NSE's Electronic Gold Receipts mean for yellow metal investors
In its circular issued on May 6, NSE said, "The Exchange has been advised to stop all fraudulent transactions/activities executed in the trading account of the complainant on May 05, 2026, till further instructions. Accordingly, the funds payout w.r.t certain client(s) who were counterparties for the said trades in certain contracts in Equity derivatives segment have been withheld."
The exchange did not disclose the identity of the broker and client in the circular.
Exchanges will release the funds for payout following instructions from the police authorities, said one of the people in the know.
