sebi:EAD-6/PM-AB/63/2018-19

SEBI · SEBI · 2018-04-03 · Prasanta Mahapatra, Adjudicating Officer

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Facts / Headnote

Penalty imposed under Section 15HA of the SEBI Act for violation of Regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations

Provisions invoked

• s. 15
• s. 15H
• s. 15I
• s. 15J

Regulations

• Reg. 3
• Reg. 2(1)(c)
• Reg. 4(1)
• Reg. 3(a)
• Reg. 4(2)(a)
• Reg. 2(1)(c)(2)
• Reg. 2(1)(c)(7)
• Reg. 2(1)(c)(8)

Holding

The Noticee violated Regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations by executing non-genuine reversal trades in illiquid Stock Options at BSE. A monetary penalty of Rs. 15,00,000/- under Section 15HA of the SEBI Act was imposed upon the Noticee.

Full text

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page2 of 17 (b), (c), (d) and Regulation 4(1), 4(2) (a) of the SEBI (Prohibition of Fraudulent and Unfair Trading Practices related to Securities Markets) Regulations, 2003 (hereinafter be referred to as, the “PFUTP Regulations”).

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page3 of 17 c) The trades entered by the Noticee were reversed on the same day with same counterparties at a substantial price difference without any basis for significant change in the contract price which indicates that these trades are artificial and are non-genuine in nature. d) A summary of dealings of the Noticee in the 64 Stock Options contracts in which the Noticee executed non-genuine reversal trades during the Investigation Period are as under: Table 1: Summary of trading of the Noticee in Illiquid Stock Options on BSE S. No. Contract Name Avg. Buy Rate (Rs.) Total Buy Volume (no. of units) Avg. Sell Rate (Rs.) Total Sell Volume (no. of units) % of Artificial trades of the Noticee in the contract to Total trades in the contract % of Artificial Volume generated by Noticee in the contract to Total Volume in the Contract 1 APLT15AUG180.00PE 2.75 50000 1.25 50000 100% 100% 2 APLT15OCT220.00CE 12.00 66000 5.25 66000 50% 77% 3 APLT15SEP170.00PE 2.50 100000 1.05 100000 33% 40% 4 APLT15SEP180.00PEW3 7.00 26000 3.05 26000 50% 34% 5 APLT15SEP190.00PE 14.00 70000 6.25 70000 100% 100% 6 APLT15SEP215.00CE 6.00 50000 2.05 50000 100% 100% 7 ASPL15AUG760.00PEW2 4.40 30000 1.05 30000 100% 100% 8 ASPL15SEP780.00PE 13.00 30000 5.25 30000 14% 12% 9 ASPL15SEP860.00PE 15.00 25000 6.45 25000 50% 43% 10 ASPL15SEP920.00CE 29.00 26000 19.85 26000 50% 50% 11 ASPL15SEP920.00CEW3 25.00 27000 17.25 27000 100% 100% 1

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page4 of 17 14 AUPL15SEP760.00PEW3 19.00 26000 10.25 26000 100% 100% 15 AXIS15AUG480.00PEW2 5.00 20000 3.15 20000 33% 18% 16 AXIS15AUG560.00PE 6.40 40000 3.25 40000 100% 100% 17 BIOC15AUG410.00PE 3.65 36000 1.05 36000 33% 32% 18 BIOC15AUG490.00CE 5.00 40000 1.05 40000 25% 22% 19 BIOC15AUG500.00CE 3.50 20000 1.50 20000 50% 29% 20 BIOC15AUG510.00CEW3 3.25 50000 0.30 50000 100% 100% 21 BIOC15SEP430.00PE 7.56 90000 2.76 90000 40% 39% 22 BIOC15SEP480.00CE 14.00 40000 9.05 40000 100% 100% 23 BPCL15AUG1000.00CE 18.95 44000 9.75 44000 100% 100% 24 BPCL15AUG900.00PE 14.00 30000 7.25 30000 50% 60% 25 BPCL15JUL900.00PE 4.70 45000 1.25 45000 100% 100% 26 BPCL15SEP1020.00CE 24.00 46000 12.25 46000 100% 100% 27 BPCL15SEP860.00PE 14.00 47000 5.25 47000 17% 26% 28 CANB15SEP340.00CE 6.00 50000 2.05 50000 100% 100% 29 CENT15AUG640.00PE 7.00 40000 2.05 40000 50% 62% 30 CIPL15AUG740.00CE 12.00 28000 3.25 28000 25% 16% 31 CIPL15SEP680.00PEW1 8.80 26000 2.75 26000 100% 100% 32 CIPL15SEP760.00CE 15.90 27000 7.25 27000 17% 11% 33 ENGI15SEP215.00PE 2.85 99000 1.05 99000 50% 50% 34 ENGI15SEP280.00CE 2.75 100000 1.05 100000 100% 100% 35 GLPL15AUG900.00PE 6.70 26000 1.25 26000 100% 100% 36 GLPL15SEP1060.00CE 21.75 24000 9.25 24000 50% 55% 37 GLPL15SEP1110.00CE 15.00 20000 10.05 20000 100% 100% 38 GLPL15SEP920.00PE 18.00 20000 10.15 20000 100% 100% 39 IOCL15AUG400.00PEW3 3.90 69000 1.05 69000 100% 100% 40 IOCL15AUG410.00PE 3

Source: SecMarx — sebi:EAD-6/PM-AB/63/2018-19. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.