sebi:Order/KS/AA/2019-20/4208
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Facts / Headnote
The excerpt records a finding that the Noticee executed non-genuine trades and generated artificial volume in the NTPC stock-options contract discussed. The final disposition and any penalty imposed are not included in the excerpt.
Provisions invoked
- s. 15
- s. 19
- s. 15H
- s. 15I
- s. 15J
- s. 15F
- s. 28A
- s. 15I(1)
Regulations
- Reg. 2(c)
- Reg. 3
- Reg. 3(a)
Parties
- Sarthak Sales Pvt. Ltd.
Holding
The adjudicating officer found that, in the NTPC stock-options contract described, the Noticee executed five non-genuine reversal trades with the same counterparty and generated artificial volume. The excerpt does not disclose the final determination of all charges or the penalty, if any.
Full text
Page 2 of 26 crore units or 54.68% of the total market volume in stock options segment of BSE during the Investigation Period. It was observed that Sarthak Sales Pvt. Ltd. (hereinafter referred to as the “Noticee”) was one of the various entities which indulged in execution of reversal trades in stock options segment of BSE during the Investigation Period. Such trades were observed to be non-genuine in nature and created false or misleading appearance of trading in terms of artificial volumes in stock options and therefore alleged to be manipulative, deceptive in nature. In view of the same, SEBI initiated adjudication proceedings against the Noticee for violation of the provisions of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).
Page 3 of 26 of the SEBI Act for the violations alleged to have been committed by the Noticee. 5. It was inter alia alleged in the SCN that the Noticee had executed 110 non genuine trades in 8 Stock Options contracts which resulted in artificial volume of total 28,24,000 units. The Noticee incurred a loss of approx. Rs. 1,93,62,200 by executing non genuine trades during the I.P. Summary of dealings of the Noticee in 8 Stock Options contracts, in which the Noticee allegedly executed non genuine trades during the I.P, is as follows: S. No. Contract Name Avg. Buy Rate (Rs.) Total Buy Volume (No. of units) Avg. Sell Rate 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 Noticee 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 1 BHRT15JUN460.00PEW2 46.17 202000 32.05 202000 100% 100% 100% 100% 2 DABU15MAY300.00PEW1 45.81 95000 26.00 95000 85% 61% 64% 47% 3 HNZL15MAY145.00CEW1 31.83 400000 22.50 400000 100% 100% 100% 100% 4 IRBI15MAY270.00PEW2 43.89 67000 29.00 67000 57% 12% 36% 9% 5 IRBI15MAY290.00PE 47.57 53000 31.25 53000 100% 47% 100% 39% 6 NTPC15JUN125.00CEW2 15.54 190000 7.20 190000 100% 100% 100% 100% 7 VEDL15MAY250.00PEW3 40.62 223000 25.05 223000 100% 100% 100% 100% 8 VOLT15APR250.0
Page 4 of 26 100% of the trades that happened in the aforementioned contracts were due to non-genuine trades executed by the Noticee. (c) A substantial 36% to 100% of volume generated by the Noticee in each of the above contracts was artificial volume, and further artificial volume generated by the Noticee also contributed to 9% to 100% of the total volume from the market in said contracts. (d) Non genuine trades executed by the Noticee in above contracts had significant differential in buy rates and sell rates considering that the trades were reversed on same day.
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Source: SecMarx — sebi:Order/KS/AA/2019-20/4208. 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.