sebi:Order/KS/AA/2019-20/4927

SEBI · SEBI · 2018-04-03 · K Saravan, Chief General Manager & 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

Penalty imposed on Noticee for violation of PFUTP Regulations

Provisions invoked

• s. 15
• s. 19
• s. 15H
• s. 15I
• s. 15J
• s. 15F
• s. 28A
• s. 15I(1)

Regulations

• Reg. 3
• Reg. 3(a)

Parties

• Remarkable Tracom Pvt. Ltd.

Holding

The Noticee, Remarkable Tracom Pvt. Ltd., was held to have violated regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 226 non-genuine reversal trades in 78 stock options contracts on BSE, generating artificial volume of 1,56,83,000 units, and a penalty of Rs. 15,00,000 was imposed under Section 15HA of the SEBI Act.

Full text

Page 2 of 16 crore units or 54.68% of the total market volume in stock options segment of BSE during the Investigation Period. It was observed that Remarkable Tracom 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 16 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 226 non genuine trades in 78 Stock Options contracts which resulted in artificial volume of total 1,56,83,000 units. The Noticee incurred a loss of approx. Rs. 3,53,18,125 by executing non genuine trades during the I.P. Summary of dealings of the Noticee in 78 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 ADPW15JUL22.00CE 7.30 92000 4.00 92000 100% 50% 100% 52% 2 ANBK15AUG70.00CE 6.37 276000 3.67 276000 100% 31% 100% 42% 3 ANBK15SEP70.00PEW3 8.57 92000 7.82 92000 100% 67% 100% 68% 4 ANBK15SEP75.00PEW2 13.32 116000 9.00 116000 100% 100% 100% 100% 5 ARVI15AUG320.00PE 14.00 21000 2.00 21000 100% 100% 100% 100% 6 ASPL15AUG900.00CE 25.00 10000 5.00 10000 100% 25% 100% 10% 7 BHRT15AUG420.00CE 13.00 21000 2.00 21000 100% 100% 100% 100% 8 BOBL15AUG180.00CE 9.60 34000 3.6

Page 4 of 16 18 FEDB15AUG50.00CEW2 20.60 100000 12.60 100000 100% 50% 100% 66% 19 FEDB15AUG50.00CEW3 18.10 144000 11.10 144000 100% 33% 100% 35% 20 FEDB15AUG65.00CEW2 6.50 88000 3.25 88000 100% 67% 100% 40% 21 FEDB15AUG65.00CEW3 3.30 80000 1.40 80000 100% 33% 100% 25% 22 FEDB15JUL57.00CE 22.00 76000 13.85 76000 100% 25% 100% 38% 23 FEDB15JUL87.00PE 10.00 112000 5.50 112000 100% 22% 100% 27% 24 FEDB15SEP75.00PEW3 13.80 104000 9.00 104000 100% 100% 100% 100% 25 GMRI15AUG10.00CEW2 5.50 247000 2.70 247000 100% 33% 100% 79% 26 GMRI15SEP8.00CEW3 4.00 195000 2.71 195000 50% 20% 47% 25% 27 HNDL15AUG105.00CE 5.00 50000 2.00 50000 100% 100% 100% 100% 28 IBRL15AUG40.00CEW1 15.56 136000 9.66 136000 100% 100% 100% 100% 29 IBRL15AUG80.00PEW3 16.50 152000 10.00 152000 100% 50% 100% 66% 30 IDBI15AUG45.00CEW3 17.80 100000 11.80 100000 100% 100% 100% 100% 31 IDBI15AUG80.00PEW2 16.30 144000 9.30 144000 100% 100% 100% 100% 32 IDBI15SEP65.00PE 9.99 276000 8.32 276000 100% 67% 100% 66% 33 IDEA15OCT140.00CEW1 7.00 500000 1.50 500000 100% 100% 100% 100% 34 IDEA15SEP160.00PEW2 12.01 90000 6.50 90000 100% 100% 100% 100% 35 IDFC15SEP120.00CEW2 10.03 50000 6.00 50000 100% 100% 100% 100% 36 IFCI15SEP26.00PE 6.70 48000 4.40 48000 100% 7% 100% 5% 37 INCM15JUL80.00CE 9.00 56000 5.50 56000 100% 50% 100% 38% 38 INCM15SEP85.00PE 12.11 132000 8.09 132000 100% 31% 100% 33% 39 INCM15SEP85.00PEW3 11.81 144000 8.00 144000 100% 71% 100% 71% 40 JAIA15SEP14.00PE 5.00 152000 3.00 152000 100% 82% 100% 59% 41 JSWE15OCT85

Source: SecMarx — sebi:Order/KS/AA/2019-20/4927. 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.