sebi:Order/SM/RG/2023-24/27396

SEBI · SEBI · 2016-07-30 · Sahil Malik, Adjudicating Officer

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Facts / Headnote

Proceedings established; monetary penalty imposed

Provisions invoked

• s. 15
• s. 15H
• s. 15J
• s. 28A

Regulations

• Reg. 4
• Reg. 3
• Reg. 4(1)
• Reg. 3(a)
• Reg. 26

Parties

• Nitin Babulal Shah HUF

Holding

The Noticee was found to have 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 at BSE, and a penalty of Rs. 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 13 2. Pursuant to a preliminary examination conducted in the ISO matter, an Interim

In the matter of dealings in Illiquid Stock Options at BSE Page 3 of 13 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. As the Noticee did not avail the opportunity of settlement, 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 relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).

In the matter of dealings in Illiquid Stock Options at BSE Page 4 of 13 7. It was observed that 13,186 entities did not avail the opportunity of settlement and therefore, Adjudication proceedings were initiated against the entities. It was observed that some of the entities against whom Orders were passed in the adjudication proceedings appealed before the Hon’ble SAT. During the course of the hearing in a group of appeals, the Hon’ble SAT, vide its Order dated May 13, 2022, inter alia held that “SEBI should reconsider and seriously give a thought in coming out with a fresh Scheme under Clause 26 of the Settlement Regulations,

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