sebi:EAD-6/PM-AB/89/2018-19

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

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Facts / Headnote

Violation established; penalty of Rs. 50,00,000 imposed under Section 15HA of the 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)
• Reg. 2(1)(c)(8)

Holding

The Noticee violated Regulations 3(a), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 1792 non-genuine reversal trades in 133 illiquid stock option contracts at BSE, and is liable to a monetary penalty of Rs. 50,00,000 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 21 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 21 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 133 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 ABNV15APR1650.00CE 59.43 20000 47.13 20000 13% 14% 2 ABNV15JUL1710.00CE 111.00 30000 56.50 30000 100% 100% 3 ABNV15JUN1650.00CE 76.28 90125 48.97 90125 76% 82% 4 ABNV15JUN1650.00PE 27.98 60000 17.61 60000 86% 86% 5 ABNV15JUN1710.00CE 75.25 60000 46.86 60000 93% 100% 6 ABNV15JUN1800.00PE 101.31 195000 65.62 195000 100% 100% 7 ABNV15MAY1800.00CE 75.50 60000 54.73 60000 41% 50% 8 ABNV15MAY1800.00PE 66.60 59000 32.08 59000 58% 60% 9 ACCL15JUL1290.00CE 49.00 15000 75.00 15000 100% 100% 10 ACCL15JUL1350.00CE 82.00 15000 36.00 15000 100% 100% 11 ACCL15JUL1500.00PE 81.68 60000 53.00 60000 100% 100% 12 ACCL15JUN1350.00CE 73.90 100000 47.27 100000 100% 100% 13 ACCL15JUN1500.00CE 25.44 135000 19.13 135000 89% 89% 14 ACCL1

Adjudication Order in the matter of dealing in Illiquid Stock Options at the BSE Page4 of 21 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 19 AUPL15JUN1350.00PE 70.69 85000 47.28 85000 100% 100% 20 AUPL15JUN1410.00PE 74.00 30000 41.81 30000 43% 50% 21 AUPL15JUN1500.00PE 109.00 30000 64.00 30000 100% 100% 22 AUPL15MAY1350.00CE 48.00 45000 38.63 45000 18% 24% 23 BAJT15JUN2250.00CE 118.00 30000 77.67 30000 100% 100% 24 BAJT15JUN2340.00CE 103.00 15000 45.00 15000 100% 100% 25 BAJT15JUN2400.00CE 47.00 30000 29.50 30000 100% 100% 26 BHEL15FEB280.00CE 9.99 25000 5.70 25000 50% 50% 27 BHFL15JUL1050.00CE 106.25 60000 68.25 60000 100% 100% 28 BHFL15JUN1050.00CE 76.67 45000 60.56 45000 100% 100% 29 BHFL15JUN1200.00PE 86.48 70000 64.45 70000 100% 100% 30 BPCL15JUN780.00CE 54.50 30000 37.55 30000 100% 100% 31 COLG15APR2100.00CE 41.67 24500 23.49 24500 30% 21% 32 COLG15JUL2100.00PE 141.50 30000 96.75 30000 100% 100% 33 COLG15JUN1950.00PE 75.86 105000 47.17 105000 100% 100% 34 COLG15JUN2010.00PE 61.40 75000 38.60 75000 100% 100% 35 DIVI15APR1800.00CE 78.20 25000 62.37 25000 32% 33% 36 DIVI15JUN1770.00CE 60.50 30000 37.55 30000 100% 100% 37 DIVI15JUN1800.00CE 67.30 45000 37.91 45000 60% 78% 38 DIVI15JUN1800.00PE 60.81 224500 36.20 224500

Source: SecMarx — sebi:EAD-6/PM-AB/89/2018-19. 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.