Description

SEBI imposed penalty on Ashirwad Tie Up Private Limited for executing non-genuine reversal trades in illiquid stock options at BSE during April 2014 to September 2015, creating artificial volumes.

Summary

SEBI’s Adjudication Order No. Order/AK/RK/2025-26/31842 concerns Ashirwad Tie Up Private Limited (PAN: AAGCA1397P) for alleged violations related to trading in illiquid stock options at BSE during April 1, 2014 to September 30, 2015. The entity allegedly executed 11 non-genuine reversal trades in 3 stock options contracts, resulting in artificial volume of 34,60,000 units. The investigation revealed that 2,91,744 trades (81.40% of all trades) in BSE’s stock options segment during the investigation period were non-genuine, creating artificial volumes. Adjudication Officer was appointed under Section 15-I of SEBI Act, 1992.

Key Points

  • Investigation period: April 1, 2014 to September 30, 2015
  • Ashirwad Tie Up Private Limited executed 11 alleged non-genuine trades in 3 stock options contracts
  • Created artificial volume of 34,60,000 units through reversal trades
  • Overall, 2,91,744 trades (81.40% of total) in BSE stock options segment were non-genuine during the period
  • Alleged violations of SEBI PFUTP Regulations 3(a), (b), (c), (d), 4(1) and 4(2)(a)
  • Show Cause Notice dated August 02, 2022 issued and served via email on August 11, 2022
  • Mr. N Hariharan initially appointed as Adjudicating Officer, later transferred with new AO appointed on April 03, 2025
  • Trades alleged to be manipulative and deceptive, creating false or misleading appearance of trading

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action applying existing SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003.

Compliance Requirements

Market participants must:

  • Refrain from executing non-genuine or reversal trades that create artificial volumes
  • Avoid manipulative, fraudulent or deceptive trading practices in stock options or any securities segment
  • Ensure all trades are executed in good faith and reflect genuine market activity
  • Not engage in trades that create false or misleading appearance of trading activity

Important Dates

  • Investigation Period: April 1, 2014 to September 30, 2015
  • Show Cause Notice Date: August 02, 2022
  • SCN Served via Email: August 11, 2022
  • Transfer of Adjudicating Officer: April 03, 2025
  • Order Date: December 2025

Impact Assessment

This adjudication order demonstrates SEBI’s continued focus on cleaning up historical market manipulation cases, particularly in illiquid stock options segment. The case reveals systemic issues at BSE during 2014-2015 where over 81% of stock options trades were non-genuine. While this specific order concerns one entity’s 11 trades, it is part of a broader enforcement initiative targeting multiple entities involved in creating artificial volumes. The action serves as a deterrent against similar manipulative practices and reinforces regulatory oversight of derivatives trading. Impact on current market operations is limited as it addresses historical violations, but establishes important enforcement precedent for detecting and penalizing reversal trades and artificial volume creation.

Impact Justification

Adjudication order against a single entity for historical trading violations in illiquid stock options. Significant for enforcement precedent but limited direct market impact as it concerns past violations during 2014-2015 period.