sebi:EAD-6/PM-AB/71/2018-19

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

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Facts / Headnote

Violation of Regulations 3(a), 4(1) and 4(2)(a) of PFUTP Regulations held established; penalty of Rs. 10,00,000 imposed under Section 15HA of SEBI Act

Provisions invoked

• s. 15
• s. 15H
• s. 15I
• s. 15J

Regulations

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

Holding

The Noticee's 174 reversal trades in 54 illiquid BSE Stock Options contracts violated Regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations, warranting a monetary penalty of Rs. 10,00,000 under Section 15HA of the SEBI Act.

Full text

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page2 of 16 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 16 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 54 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 ADPW15FEB52.00PE 2.98 1344000 0.05 840000 2% 11% 2 ALBK15MAR95.00PEW1 2.10 502000 0.06 502000 41% 61% 3 ALLD15MAR75.00CEW3 2.20 96000 0.20 96000 4% 1% 4 ANBK15APR65.00PEW2 0.05 468000 1.55 468000 50% 74% 5 ANBK15MAR100.00CEW3 1.85 2288000 0.10 2288000 23% 42% 6 ANBK15MAR80.00PEW3 2.90 96000 0.10 96000 50% 96% 7 HDIL15FEB115.00CE 5.30 364000 1.95 364000 60% 54% 8 IBRL15FEB85.00CE 2.25 40000 0.05 40000 33% 11% 9 IDBI15MAR75.00CE 0.50 272000 2.25 272000 4% 6% 10 IOBL15MAR44.00CE 0.05 148000 0.95 148000 24% 5% 11 IOBL15MAR45.00CE 0.05 204000 0.55 204000 15% 5% 12 IOBL15MAR46.00CEW3 1.77 228000 0.08 228000 29% 11% 13 ITCL15MAR340.00CEW3 7.50 98000 1.27 98000 50% 18% 14 JISL15MAR80.00CEW1 2.15 124000 0.05 124000 40% 7

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page4 of 16 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 16 JPPW14AUG24.00CEW2 1.48 210000 0.05 210000 31% 35% 17 JPPW14OCT10.00PE 1.02 270000 0.05 270000 50% 69% 18 JPPW14OCT16.00CE 0.90 330000 0.05 330000 10% 14% 19 LNTF15FEB80.00CE 2.94 416000 0.05 416000 32% 40% 20 LNTF15MAR70.00CEW3 2.00 144000 0.10 144000 5% 4% 21 LNTF15MAR75.00CEW1 3.10 52000 0.10 52000 3% 1% 22 LNTF15MAR80.00CEW1 2.89 408000 0.05 408000 14% 24% 23 PNBK15MAR160.00CE 2.10 180000 4.80 180000 17% 23% 24 PTCI15FEB95.00CE 3.00 92000 0.10 92000 17% 11% 25 PTCI15MAR95.00CEW1 2.50 264000 0.20 264000 100% 100% 26 RCOM15FEB70.00CE 2.35 96000 0.05 96000 18% 9% 27 RCOM15MAR60.00PEW1 2.29 404000 0.10 404000 38% 50% 28 RCOM15MAR70.00CEW2 2.60 96000 0.10 96000 20% 14% 29 RCOM15MAR75.00CEW1 1.40 76000 0.10 76000 7% 5% 30 RCOM15MAR75.00CEW2 2.60 108000 0.08 108000 20% 12% 31 RCOM15MAR80.00CEW1 2.00 248000 0.10 248000 20% 23% 32 RCOM15MAR80.00CEW2 1.75 588000 0.05 588000 42% 27% 33 RCOM15MAR90.00CEW2 1.98 712000 0.05 712000 29% 61% 34 RPOW15MAR60.00CEW3 3.90 68000 0.25 68000 11% 2% 35 RPOW15MAR75.00CEW1 2.40 96000 0.20 96000 9% 10% 36 SAIL15MAR65.00PEW3 3.25 108000 0.10 108000 9% 3%

Source: SecMarx — sebi:EAD-6/PM-AB/71/2018-19. 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.