In Brief
Rusoday Securities, a trading member of NSE, exceeded gross exposure limits in 1997 and was suspended. After failing to maintain required capital deposits despite opportunities, it was expelled in 2006. It also received withheld securities as collateral for unsettled dues. The Supreme Court upheld the expulsion, holding that operational parameters prescribing exposure limits and withdrawal procedures are valid under the Exchange's delegated powers without separate government approval, and a member bound by undertaking must comply. The Court found the Exchange had limited fiduciary duty regarding withheld securities, permitting discretionary dealing (closing out or registration) but not mandating registration. The Court allowed recovery from withheld securities and directed return of surplus amounts with interest after final settlement calculation.",
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