sebi:Order/KS/AA/2019-20/4933
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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
- Savasthi Investments Limited
Holding
The Noticee, Savasthi Investments Limited, was found to have violated regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations by executing 229 non-genuine reversal trades in 18 stock options contracts on BSE, and a penalty of Rs. 5,00,000 was imposed under Section 15HA of the SEBI Act.
Full text
Page 2 of 14 crore units or 54.68% of the total market volume in stock options segment of BSE during the Investigation Period. It was observed that Savasthi Investments Limited (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 14 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 229 non genuine trades in 18 Stock Options contracts which resulted in artificial volume of total 16,64,500 units. The Noticee a loss of approx. Rs. 1,16,26,813 by executing non genuine trades during the I.P. Summary of dealings of the Noticee in 18 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 ACCL15APR1560.00CE 69.69 67000 40.56 67000 100% 82% 100% 30% 2 ADEL15APR600.00CE 34.42 74000 24.97 74000 100% 100% 100% 100% 3 ARVI15JAN270.00CE 8.05 30000 5.55 30000 100% 100% 100% 100% 4 BHEL15JAN280.00CE 7.98 62000 4.74 62000 100% 100% 100% 100% 5 CESC15JAN740.00PE 20.92 22000 13.24 22000 100% 100% 100% 100% 6 COAL15JAN390.00CE 8.34 20000 5.68 20000 100% 100% 100% 100% 7 COAL15JAN400.00CE 3.50 8000 1.50 8000 100% 100% 100% 100% 8 DRRL15APR3400.00CE 159.50 30000 108.64 3
Page 4 of 14 6. From the above table, following was noted as regards to dealings of the Noticee: (a) The Noticee has executed non genuine trades in 18 contracts, wherein all trades of the Noticee in the said 18 contracts were non genuine trades. (b) No. of non genuine trades of the Noticee has significantly contributed to the total no. of trades from the market in the above contracts, as 12% to 100% of the trades that happened in the aforementioned contracts were due to non-genuine trades executed by the Noticee. (c) A substantial 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 7% 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/2019-20/4933. 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.