sebi:ORDER/GR/KG/2019-20/3503
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Facts / Headnote
Penalty imposed on the Noticee for violation of PFUTP Regulations
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15J
- s. 15F
- s. 28A
- s. 2(1)
Regulations
- Reg. 4
- Reg. 3
- Reg. 2(1)(c)
- Reg. 4(1)
- Reg. 2(1)
- Reg. 2
- Reg. 3(a)
- Reg. 2(1)(c)(8)
Parties
- Femina Stock Management Company Limited
Holding
The Noticee violated Regulations 3(a), (b), (c), (d) and 4(1), 4(2)(a) of the PFUTP Regulations by executing reversal trades in illiquid stock options contracts at BSE, creating artificial volume and a false or misleading appearance of trading, and a penalty of Rs. 5,00,000/- was imposed under Section 15HA of the SEBI Act.
Full text
Adjudication Order in respect of Femina Stock Management Company Ltd. Page 2 of 19 trades which involved reversal of buy and sell positions by the clients and counterparties in a contract. The Noticee was one such client whose reversal trades involved squaring off open positions with a significant difference without any basis for such change in the contract price. The aforesaid reversal trades allegedly resulted into generation of artificial volumes, leading to allegations that the Noticee had violated Regulation 3(a), (b), (c), (d) and Regulation 4(1), 4(2) (a) of the PFUTP Regulations.
Adjudication Order in respect of Femina Stock Management Company Ltd. Page 3 of 19 should not be imposed under Section 15HA of the SEBI Act, on the Noticee for the alleged violation of Regulation 3 (a), (b), (c), (d) and 4 (1), 4 (2) (a) of PFUTP Regulations. The SCN sent to the registered office address of the Noticee had returned undelivered with the postal endorsement “unclaimed”. The allegations levelled against the Noticee in the SCN are summarized as below:
Adjudication Order in respect of Femina Stock Management Company Ltd. Page 4 of 19 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 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 generate d by Noticee in the contract to Total Volume in the Contract 2 ALBK15APR95.00CEW1 2.45 450000 0.40 450000 100% 100% 100% 100% 3 AMTK15APR120.00CEW2 22.88 200000 12.90 200000 100% 33% 100% 75% 4 AMTK15APR135.00CEW1 3.00 180000 8.00 180000 100% 20% 100% 49% 5 DLFL15APR150.00CEW1 11.00 76000 6.00 76000 100% 33% 100% 62% 6 EXID15APR170.00CEW1 10.00 40000 7.00 40000 100% 50% 100% 71% 7 FEDB15APR120.00CEW1 13.00 200000 8.25 200000 100% 13% 100% 41% 8 GMRI15APR14.00CEW1 1.80 1834600 1.25 1834600 100% 100% 100% 100% 9 HDIL15APR95.00CEW1 8.00 160000 5.00 160000 100% 22% 100% 54% 10 IDFC15APR145.00CEW2 25.01 280000 16.03 280000 100% 47% 100% 30% 11 INCM15APR85.00CEW1 7.60 420000 4.50 420000 100% 100% 100% 100% 12 IOBL15JUL42.00CEW4 1.15 64000 0.05 64000 100% 50% 100% 40% 13 SOIB15JUL26.00CEW3 1.15 495000 0.15 495000 100% 35% 100% 23% 14 TATP15JUL80.00CEW3 2.45 416000 0.05 416000 100% 6% 100% 31%
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Source: SecMarx — sebi:ORDER/GR/KG/2019-20/3503. 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.