MUMBAI, Oct 8: Emkay Global Financial Services today admitted an error on its part for the 900-point flash crash of the NSE index Nifty on Friday morning, and said it would help the stock exchange in probe into the matter.
The shares of the company fell by 10 per cent this morning. They had seen a similar plunge on Friday as well.
In a clarification to the stock exchanges, Emkay Global said, “On October 5, while executing an order to transact a Nifty cash basket, in Nifty-50, a dealer committed a bona fide error.
“The error was in entering the value of the order as the quantity of Nifty-50 basket to be transacted. The order got transmitted to the NSE trading server as a single large Nifty basket order comprising of Nifty 50 stocks.
“Immediately on realising the error, we promptly got in touch with the NSE and kept in touch with them to co-ordinate all future course of action until the entire erroneous outstanding position was closed out.”
The company’s scrip continued its southward journey for the second consecutive day and tanked 10 per cent to hit the lower trading limit today.
Soon after the opening trade, shares of the company plunged 9.97 per cent to to touch the lower circuit limit of Rs 28 on the BSE. At NSE, the stock plummeted 9.98 per cent.
The Nifty on Friday morning fell by about 900 points within seconds in a flash crash like situation, which led to a halt in trading at NSE for about 15 minutes.
The NSE had said there was no technical glitch in its system and blamed the crash on erroneous orders worth over Rs 650 crore for multiple trades by Emkay Global in various stocks at low prices for an “institutional client”.
Emkay Global further said, “All our remaining clients’ outstanding positions are intact and we will continue to service all obligations. We are hopeful that this obvious and apparent error would justify the annulment of these trades, and believe in the NSE’s professional management to see the merits for annulment, which is the practice worldwide.”
The NSE has disabled trading for us to facilitate investigations and primarily to prevent any further exposure until this settlement is completed, the company said.
“We are actively working with the NSE to facilitate this process and to bring it to an expeditious closure. We wish to clarify and confirm that our membership has not been suspended as has been inaccurately reported in some sections of the media. We are adequately capitalised to meet all our financial obligations,” Emkay said.
“We trust that this unfortunate, although bona fide, error will be put behind us expeditiously and remain committed to serving our stakeholders, shareholders and clients,” it noted. (PTI)
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