Mumbai: The Securities and Exchange Board of India (SEBI) today (Dec 3, 2004) suffered a setback for the second time within two months as the Securities and Appellate Tribunal (SAT) has set aside the order of the market regulator against Shankar Sharma promoted First Global Stockbroking Ltd as a broker from participating in the capital market.

The registration of First Global to act as a broker and portfolio manager was cancelled by SEBI while in the case of Vruddhi Confinwest India Ltd, it had cancelled its sub-broker registration in September 2002 following investigations by SEBI into the securities market scam of 2001.

This is the second time in less than two months that SEBI has to face a reversal of its order. On October 15, SAT cleared Samir Arora, former fund manager with Alliance Capital Management, from charges of insider trading, involvement in unfair and fraudulent trade practices and professional misconduct. SEBI has moved the Supreme Court in this matter.

A SEBI official when contacted on today's SAT verdict said the appellate body has set aside the order on technical grounds.

There is an issue of law involved in it where it was contended that market regulator did not pass order within 30 days as required under earlier regulations, the official said.

The legal issue involved is whether the stipulation of 30 days was mandatory or directory where the spirit of law is crucial, the official added.

The regulator will study the verdict and decide on the future course of action, including filing an appeal in the Supreme Court, he said.