sebi:Order/BS/DP/2023-24/28362
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Facts / Headnote
Penalty imposed on the Noticee for violation of PFUTP Regulations
Provisions invoked
- s. 11B
- s. 11
- s. 15
- s. 15H
- s. 15J
- s. 28A
Regulations
- Reg. 3
- Reg. 4(1)
- Reg. 3(a)
- Reg. 26
Parties
- Ms. Bimla Devi Agarwal
Holding
The Noticee, Ms. Bimla Devi Agarwal, violated Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing non-genuine reversal trades in illiquid stock options on BSE, and a monetary penalty of ₹5,00,000 was imposed under Section 15HA of the SEBI Act.
Full text
In the matter of dealings in Illiquid Stock Options at BSE Page 2 of 12 2. Pursuant to investigation by SEBI, it was observed that during IP, a total of 2,91,744 trades comprising substantial 81.38% of all the trades executed in Stock Options of BSE were trades which involved reversal of buy and sell positions by the clients and counterparties in a contract. The investigation revealed that 14,720 entities were involved in executing non-genuine trades in BSE’s Stock Options segment during the investigation period. The proceedings initiated against a first set of 59 entities, were disposed of vide final Order dated April 05, 2018, without any further directions, observing that the Adjudicating Officer shall continue the proceedings in accordance with the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as the “SEBI Act”) and SEBI (Procedure for Holding and Imposing Penalties) Rules, 1995 (hereinafter referred to as the “Adjudication Rules”) and pass appropriate order on merits.
In the matter of dealings in Illiquid Stock Options at BSE Page 3 of 12 5. It was alleged that the Noticee was one of the entities that indulged in creating artificial volume of 5,76,000 units through 2 non-genuine trades in 1 Stock Option contract. The aforesaid reversal trade is illustrated through the dealings of the Noticee in one contract viz. “JAIA15APR16.00CE” during the investigation period as follows:
In the matter of dealings in Illiquid Stock Options at BSE Page 4 of 12 8. Accordingly, SEBI introduced a Settlement Scheme i.e. SEBI Settlement Scheme, 2022 (hereinafter referred to as “Settlement Scheme 2022”) in terms of Regulation 26 of the Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018 (hereinafter referred to as “Settlement Regulations”). The Scheme provided a onetime opportunity to the entities against whom proceedings had been initiated and appeals against the said proceedings are pending before any forum or authority.
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Source: SecMarx — sebi:Order/BS/DP/2023-24/28362. 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.