IL&FS Securities Services (ISSL), which is in a peculiar tangle due to a fraud involving broker Allied Financial Services, declared a default in payments on Monday.
In a letter to its trading members, ISSL said it will not be able to pay them as NCC, the clearing and settlement arm of the National Stock Exchange, has not released its payment. This default will impact several high-net-worth individuals and small players who traded in equity derivatives and where ISSL was a clearing member for them.
The payment issue between ISSL and NCC involves close to ₹400 crore. ISSL has to receive that amount from Allied Financial, a task complicated by it now involving legal hurdles. ISSL had around ₹100 crore of its own cash but the balance locked up with NCC belongs to clients of other brokers, sources involved in the negotiation said.
