Description

SEBI adjudication order against Vikash Chirimar for executing non-genuine reversal trades in illiquid stock options at BSE during April 2014 to September 2015, creating artificial volumes in violation of PFUTP Regulations.

Summary

SEBI has issued an adjudication order against Vikash Chirimar (PAN: AAHHV8471P) for violating PFUTP Regulations through execution of non-genuine reversal trades in illiquid stock options at BSE. During the investigation period from April 1, 2014 to September 30, 2015, the noticee executed 17 non-genuine trades in 2 stock options contracts, resulting in artificial volume of 488,000 units. The trades were part of a larger scheme where 2,91,744 trades (81.40% of all stock options trades at BSE) were identified as non-genuine, creating artificial volumes in the stock options segment.

Key Points

  • Investigation period: April 1, 2014 to September 30, 2015
  • Vikash Chirimar executed 17 non-genuine trades in 2 stock options contracts
  • Artificial volume created: 488,000 units
  • Overall investigation found 2,91,744 non-genuine trades (81.40% of all stock options trades at BSE)
  • Adjudication proceedings initiated under Section 15-I of SEBI Act, 1992
  • Violations alleged under Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a) of PFUTP Regulations, 2003
  • Show Cause Notice issued on August 10, 2022
  • Case transferred to current Adjudicating Officer on April 03, 2025

Regulatory Changes

No new regulatory changes announced. This is an enforcement action under existing PFUTP Regulations, 2003.

Compliance Requirements

This order serves as a reminder to market participants to:

  • Avoid execution of reversal trades that create artificial volumes
  • Ensure all trades in stock options are genuine and reflect true market activity
  • Refrain from manipulative or deceptive trading practices that create false or misleading appearance of trading
  • Comply with SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003

Important Dates

  • Investigation Period: April 1, 2014 to September 30, 2015
  • Show Cause Notice issued: August 10, 2022
  • Adjudicating Officer transfer: April 03, 2025
  • Document publication: December 17, 2025

Impact Assessment

This adjudication order is part of SEBI’s broader crackdown on artificial volume creation in illiquid stock options at BSE. The investigation revealed that over 81% of stock options trades during the investigation period were non-genuine, indicating systemic manipulation in this segment. The enforcement action demonstrates SEBI’s commitment to maintaining market integrity and deterring manipulative trading practices. Market participants trading in stock options, particularly in illiquid contracts, should ensure compliance with PFUTP Regulations to avoid similar enforcement actions. The order impacts individual traders and reinforces regulatory scrutiny of reversal trades and artificial volume creation in derivatives segments.

Impact Justification

Individual adjudication order for manipulative trading practices in illiquid stock options segment during 2014-2015 period. Part of larger investigation into artificial volume creation at BSE.