sebi:Order/SM/AR/2021-22/14791
Facts / Headnote
Penalty imposed on the Noticee for violation of PFUTP Regulations, 2003
Provisions invoked
- s. 15
- s. 15H
- s. 15J
- s. 11C
- s. 15F
- s. 28A
Regulations relied on
- SEBI (PFUTP) Regulations, 2003 — 3
- SEBI (PFUTP) Regulations, 2003 — 3(a)
- SEBI (PFUTP) Regulations, 2003 — 4(1)
- SEBI (PFUTP) Regulations, 2003 — 5
- SEBI (PFUTP) Regulations, 2003 — 6
Parties
- Abhishek Kayan HUF
Holding
The Noticee violated regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 by executing non-genuine reversal trades in stock options on BSE that created false and misleading appearance of trading and artificial volumes, and a penalty of Rs. 5,00,000/- was imposed under section 15HA of the SEBI Act.
Full text
Page 2 of 23 the clients and counterparties in a contract on the same day. It was observed that Abhishek Kayan HUF (PAN: AAHHA2896K) (hereinafter referred to as “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 the provisions of regulations 3(a), (b), (c), (d) and regulations 4(1), 4(2)(a) of the SEBI (Prohibition of Fraudulent and Unfair Trading Practices related to Securities Markets) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations, 2003”).
Page 3 of 23 not be initiated against the Noticee and penalty not be imposed on the Noticee under Section 15HA of the SEBI Act for the violations alleged to have been committed by the Noticee.
Page 4 of 23 8. The abovementioned reversal trades and volumes are illustrated through the dealings of Noticee in one contract, viz., “IOBL15JUN34.00CEW1” during the investigation period, as follows:
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