sebi:Order/VV/NK/2023-24/28769

SEBI · SEBI · 2018-04-05 · Vijayant Kumar Verma, Adjudicating Officer

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Facts / Headnote

Penalty of Rs. 5,00,000 imposed on Noticee under Section 15HA of SEBI Act for violation of PFUTP Regulations

Provisions invoked

• s. 15
• s. 15H
• s. 15J
• s. 28A

Regulations

• Reg. 3
• Reg. 2(1)(c)
• Reg. 4(2)
• Reg. 3(a)
• Reg. 26
• Reg. 2(1)(c)(2)
• Reg. 2(1)(c)(7)
• Reg. 2(1)(c)(8)

Parties

• SATYAWATI

Holding

Noticee SATYAWATI executed non-genuine reversal trades in illiquid BSE stock options in violation of Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of the PFUTP Regulations, 2003 and is liable to a monetary penalty of Rs. 5,00,000 under Section 15HA of the SEBI Act.

Full text

Adjudication Order in respect of SATYAWATI in the matter of dealings in Illiquid Stock Options on BSE Page 2 of 22 were involved in executing non-genuine trades in BSE’s stock options segment during the investigation period and also revealed that of all trades executed in the stock options segment of BSE during the Investigation Period, 81.38% of the trades, that is 2,91,643 trades, were trades which involved a reversal of buy and sell positions by the clients and counterparties in a contract. It was observed that, SATYAWATI (herein after referred to as “Noticee”) was one such various entities whose reversal trades involved squaring off transactions with significant difference in the sell value and buy value of the transactions. 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 relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”).

Adjudication Order in respect of SATYAWATI in the matter of dealings in Illiquid Stock Options on BSE Page 3 of 22 5. Accordingly, a Settlement Scheme was framed under the SEBI (Settlement Proceedings) Regulations, 2018, which provided a one-time opportunity for settlement of proceedings in the Illiquid Stock Options matter. The said scheme was kept open from August 01, 2020 till December 31, 2020. Finally, adjudication proceedings were initiated against those entities who did not avail the opportunity of settlement.

Adjudication Order in respect of SATYAWATI in the matter of dealings in Illiquid Stock Options on BSE Page 4 of 22 8. Accordingly, SEBI introduced a Settlement Scheme i.e. SEBI Settlement Scheme, 2022 (hereinafter referred to as “Scheme 2022”) in terms of Regulation 26 of the SEBI (Settlement Proceedings) Regulations, 2018 (hereinafter referred to as “Settlement Regulations”). The Scheme provided a onetime opportunity to the entities against whom proceedings had been initiated and/or appeals against the said proceedings are pending before any forum or authority.

Source: SecMarx — sebi:Order/VV/NK/2023-24/28769. 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.