sebi:EAD-7/BJD/NJMR/2018-19/1628

SEBI · SEBI · B J Dilip, Adjudicating Officer

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Facts / Headnote

Noticee held liable for violations of SEBI (PFUTP) Regulations, 2003; penalty imposed under Section 15HA of SEBI Act (amount not specified in excerpt)

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

• Prarambh Securities Pvt Ltd

Holding

The Noticee, Prarambh Securities Pvt Ltd, was held to have violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the SEBI (PFUTP) Regulations, 2003 by executing non-genuine reversal trades in illiquid Stock Options contracts on BSE, creating artificial volumes and a false or misleading appearance of trading.

Full text

Adjudication Order in respect of Prarambh Securities Private Ltd., Page 2 of 26 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 it for execution of non-genuine trades.

Adjudication Order in respect of Prarambh Securities Private Ltd., Page 3 of 26 Sl. No Contract Name Avg. Buy Rate (`) Total Buy Volume (no. of units) Avg. Sell Rate (`) Total Sell Volume (no. of units) Numb er of non genuin e trades execut ed by Entity in the Contra ct Total num ber of trade s exec uted by the Entit y in the Contr act Total num ber of trade s exec uted 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 generate d 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 14 LNTF15SEP55.00CEW3 6.00 32000 9.00 32000 3 3 5 100% 60% 100% 22% 15 LNTF15SEP55.00PEW3 0.05 176000 2.30 176000 16 16 19 100% 84% 100% 62% 16 NMDC15SEP90.00CEW2 9.35 38000 13.00 38000 2 2 2 100% 100% 100% 100% 17 PGCL15SEP125.00CE 8.00 106000 11.11 106000 2 5 9 40% 22% 81% 29% 18 PTCI15SEP50.00CE 6.80 176000 11.42 176000 3 3 6 100% 50% 100% 75% 19 SOIB15OCT24.00PEW1 2.70 387000 4.00 387000 4 4 4 100% 100% 100% 100% 20 TATP15OCT50.00CEW2 9.60 140000 14.51 140000 2 3 10 67% 20% 86% 39% 21 TATP15SEP50.00CE 9.19 84000 15.10 84000 3 3 26 100% 12% 100% 11% 22 TATP15SEP50.00CEW3 9.50 76000 15.00 76000 2 3 13 67% 15% 53% 15% 23 TATP15SEP70.00PE 6.00 84000 10.81 84000 3 3 10 100% 30% 100% 28% 24 TATP15SEP75.00PE 8.12 336000 12.58 336000

Adjudication Order in respect of Prarambh Securities Private Ltd., Page 4 of 26 7. In view of the foregoing, it was alleged that the Noticee, indulged in execution of reversal of trades in Stock Options with same entities on the same day. Such trades are non-genuine in nature and have created false or misleading appearance of trading in terms of artificial volumes in stock options and therefore alleged to be manipulative, deceptive in nature. Thus, it was alleged that the Noticee had violated the provisions of Regulation 3(a), (b), (c), (d), 4(1) and 4(2) (a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.

Source: SecMarx — sebi:EAD-7/BJD/NJMR/2018-19/1628. 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.