sebi:EAD-7/BJD/BKM/2018-19/1873

SEBI · SEBI · B J Dilip, Adjudicating Officer

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Noticee found to have violated Regulations 3(a), 3(b), 3(c), 3(d), 4(1) and 4(2)(a) of PFUTP Regulations; penalty determination under Section 15HA of SEBI Act

Provisions invoked

• s. 15
• s. 19
• s. 15H
• s. 15I
• s. 15J
• s. 15I(1)

Regulations

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

Parties

• Prompt Commodities Ltd

Holding

The Noticee, Prompt Commodities Ltd, was held to have violated Regulations 3(a), 3(b), 3(c), 3(d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing non-genuine reversal trades in Stock Options on BSE that created false or misleading appearance of trading through artificial volume.

Full text

Adjudication Order in respect of Prompt Commodities Ltd Page 2 of 27 3. It was observed that the said non- genuine trades were not restricted to any specific contract or between any specific set of entities. It was observed that Prompt Commodities Ltd (hereinafter referred to as “Noticee”) was one of the various entities which were indulged in execution of non-genuine trades in Stock Options Segment of BSE during the investigation period. The following points narrate the dealings of the Noticee during the investigation period and the allegations against him for execution of non-genuine trades.

Adjudication Order in respect of Prompt Commodities Ltd Page 3 of 27 S. No Contract Name Avg. Buy Rate (Rs.) Total Buy Volume (no. of units) Avg. Sell Rate (Rs.) Total Sell Volume (no. of units) Numb er of non genuin e trades execut ed by Entity in the Contra ct Total numb er of trades execu ted by the Entit y in the Contr act Total numb er of trades execu ted in the contr act % of Non Genuine trades of Noticee in the contract to Noticee’s Total trades in the Contract % of Non Genuine trades of Entity in the contract to Total trades in the Contract % of Artificial Volume generated by Noticee in the contract to Noticee’s Total Volume in the Contract % of Artificial Volume generated by Noticee in the contract to Total Volume in the Contract 6 APLT15FEB165.00CE 13.07 200000 6.66 200000 4 4 14 100% 29% 100% 57% 7 APLT15FEB185.00PE 11.05 60000 6.05 60000 2 2 2 100% 100% 100% 100% 8 APLT15FEB190.00PE 17.10 44000 8.10 44000 2 2 2 100% 100% 100% 100% 9 APLT15JAN250.00PE 31.00 100000 19.58 100000 8 8 18 100% 44% 100% 43% 10 APLT15JUL200.00PE 3.98 120000 1.45 120000 3 3 3 100% 100% 100% 100% 11 APLT15JUL210.00PE 13.97 76000 8.87 76000 5 5 5 100% 100% 100% 100% 12 ARVI15FEB270.00CEW2 12.90 38000 6.70 38000 2 2 11 100% 18% 100% 26% 13 ARVI15FEB280.00CEW1 22.10 105000 12.54 105000 9 9 25 100% 36% 100% 49% 14 ARVI15FEB290.00CE 14.70 44000 8.50 44000 2 2 10 100% 20% 100% 27% 15 BHEL15FEB265.00CE 14.65 191000 6.69 191000 8 8 8 100% 100% 100% 100% 16 BIOC15APR450.00PEW1 33.20 318000 20.66 318

Adjudication Order in respect of Prompt Commodities Ltd Page 4 of 27 S. No Contract Name Avg. Buy Rate (Rs.) Total Buy Volume (no. of units) Avg. Sell Rate (Rs.) Total Sell Volume (no. of units) Numb er of non genuin e trades execut ed by Entity in the Contra ct Total numb er of trades execu ted by the Entit y in the Contr act Total numb er of trades execu ted in the contr act % of Non Genuine trades of Noticee in the contract to Noticee’s Total trades in the Contract % of Non Genuine trades of Entity in the contract to Total trades in the Contract % of Artificial Volume generated by Noticee in the contract to Noticee’s Total Volume in the Contract % of Artificial Volume generated by Noticee in the contract to Total Volume in the Contract 34 ENGI15JUL220.00CE 13.56 179000 5.80 179000 4 4 4 100% 100% 100% 100% 35 ENGI15JUL290.00PEW4 57.45 20000 34.95 20000 2 2 2 100% 100% 100% 100% 36 EXID15APR165.00CEW1 21.30 114000 12.75 114000 4 4 14 100% 29% 100% 23% 37 EXID15JAN170.00CE 36.90 100000 25.21 100000 8 8 21 100% 38% 100% 33% 38 EXID15JUL135.00CE 17.93 90000 10.80 90000 4 4 4 100% 100% 100% 100% 39 FEDB15JAN125.00CE 20.68 120000 12.20 120000 7 7 7 100% 100% 100% 100% 40 FEDB15JAN160.00PE 16.16 120000 9.10 120000 7 7 19 100% 37% 100% 39% 41 FEDB15JUL60.00CE 9.18 156000 6.00 156000 3 3 9 100% 33% 100% 36% 42 GAIL15APR370.00CEW1 18.30 436000 9.56 436000 5 5 11 100% 45% 100% 85% 43 HAIL15JAN250.00CE 39.20 100000 26.41 100000 11 11 11 100% 100% 100% 100% 44 HAIL15MAR270.00CEW3 28.67

Source: SecMarx — sebi:EAD-7/BJD/BKM/2018-19/1873. 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.