NSE Halts Dividend Payments Amid Allegations of Client Account Irregularities

NSE Halts Payouts for Nifty Weekly Options Trades Amid Fraud Investigation

The National Stock Exchange (NSE) has halted payouts for trades executed last Tuesday at the expiry of the Nifty weekly options, following a police complaint filed by a client in Jodhpur against a broking firm's franchisee. The complaint alleged that the franchisee was running fraudulent and unauthorized transactions in the client's account.

According to a market source, the payout has been held back for several clients who were part of the transactions. Payout refers to the transfer of funds from one broker's account to another whose clients were part of a transaction. The NSE halted the payout following instructions from its enforcement authority (EA).

On May 6, the NSE issued a circular stating that it had been advised to stop all "fraudulent transactions/activities executed in the trading account of the complainant on May 5, 2026, till further instructions." The circular further stated that the funds payout with respect to certain clients who were counterparties for the said trades in certain contracts in the Equity derivatives segment have been withheld. The matter is under investigation with the Enforcement Authority.

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Weekly equity options on indices like Nifty have become increasingly popular with investors and traders post the pandemic, with the rise in margins for clients to trade intraday in the equity cash segment to 20% from a negligible amount since then. These options allow retail and other traders to take a view on how the Nifty would expire every Tuesday. A call gives the buyer the right but not the obligation to buy an underlier, while a put gives a buyer the right to sell. In the case of options sellers, they are obligated to buy or sell the underliers. Index options are cash-settled as indices cannot be delivered, making them highly popular products.

The NSE had a market share of 74.7% in equity options in FY26, with the BSE holding the rest through its Sensex options. Options contracts are the mainstay of revenues for an exchange. For instance, equity options constituted 77% of standalone transaction fees worth ₹12,945 crore earned by the NSE in FY26. The rest was contributed by equity cash and equity futures.