sebi:EAD-6/PM-AB/84/2018-19

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

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Facts / Headnote

Penalty of Rs. 9,00,000 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. 3(a)
• Reg. 4(2)(a)
• Reg. 2(1)(c)(2)
• Reg. 2(1)(c)(7)
• Reg. 2(1)(c)(8)

Holding

The Noticee executed non-genuine reversal trades in illiquid stock options at BSE in violation of Regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations and is liable to a monetary penalty of Rs. 9,00,000 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 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 38 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 ADPW14SEP50.00CE 0.25 664000 0.84 408000 33% 46% 2 ADPW14SEP50.00CEW2 0.27 296000 2.05 296000 50% 79% 3 ALLD14NOV48.00PEW3 0.05 484000 1.09 484000 60% 92% 4 ALLD15FEB45.00PEW2 0.10 408000 1.10 408000 43% 54% 5 ALLD15MAR60.00PE 0.05 232000 1.99 232000 17% 5% 6 ANBK14NOV80.00PEW3 0.05 84000 2.24 84000 27% 28% 7 CESC14OCT760.00CEW1 5.00 15500 29.00 15500 50% 30% 8 CIPL15AUG740.00PEW2 14.60 21000 33.65 21000 33% 40% 9 DISH14OCT50.00PEW3 0.05 288000 1.85 288000 63% 24% 10 DLFL15JUL100.00PEW4 0.05 196000 2.60 196000 20% 31% 11 IDBI14SEP75.00PE 0.65 4000 2.05 4000 50% 3% 12 IDBI15APR70.00PE 0.20 288000 2.30 288000 13% 39% 13 IDBI15JUL55.00PEW2 0.05 84000 2.60 84000 7% 5% 14 IDBI15MAY60.00PEW2 0.05 200000 2.55 200000 27

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page4 of 16 e) By indulging in execution of aforesaid non-genuine reversal trades, the Noticee has violated Regulations 3(a),(b),(c),(d) and 4(1), 4(2)(a) of the PFUTP Regulations, text of which is reproduced as under: “SEBI (Prohibition of Fraudulent and Unfair Trading Practices Related to Securities Markets) Regulations, 2003

Source: SecMarx — sebi:EAD-6/PM-AB/84/2018-19. 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.