Description

SEBI adjudication order imposing penalty on Goldenmaple Commodities Private Limited for executing non-genuine reversal trades in Illiquid Stock Options on BSE during April 2014 to September 2015, in violation of PFUTP Regulations.

Summary

SEBI has issued an adjudication order (Order/JS/YK/2025-26/32155) against Goldenmaple Commodities Private Limited (PAN: AAJCS8332D) for executing non-genuine reversal trades in Illiquid Stock Options (ISO) on BSE during the investigation period of April 1, 2014 to September 30, 2015. The trades were found to be manipulative and deceptive in nature, creating artificial trading volumes in violation of SEBI’s PFUTP Regulations.

Key Points

  • Goldenmaple Commodities Private Limited was found to have participated in large-scale reversal trades in the Illiquid Stock Options segment of BSE.
  • During the investigation period, 2,91,643 reversal trades were identified, comprising 81.38% of all trades executed in BSE’s stock options segment.
  • A total of 14,720 entities were found to have executed non-genuine trades; Goldenmaple was one of them.
  • Reversal trades involved entities reversing buy/sell positions in a contract with the same counterparty, lacking genuine trading rationale.
  • These trades allegedly created a false or misleading appearance of trading activity and artificial volume in stock option contracts.
  • A Show Cause Notice was issued on September 16, 2021; the adjudicating officer was appointed on April 04, 2025 following a case transfer.
  • Proceedings are under Section 15HA of the SEBI Act, which deals with penalties for fraudulent and unfair trade practices.

Regulatory Changes

No new regulatory changes are introduced. This order applies existing provisions of:

  • SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 — Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a).
  • Section 15-I and Section 15HA of the SEBI Act, 1992.
  • SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995 — Rule 5.

Compliance Requirements

  • Market participants must not engage in reversal trades or any scheme that creates artificial volumes or a false appearance of trading activity.
  • Entities dealing in derivatives, particularly illiquid options, must ensure trades have genuine economic rationale and are not coordinated with counterparties to manufacture volume.
  • Firms must retain records and cooperate with SEBI investigations and adjudication proceedings.

Important Dates

  • Investigation Period: April 1, 2014 – September 30, 2015
  • Show Cause Notice Issued: September 16, 2021
  • Adjudicating Officer Appointed: April 4, 2025
  • Adjudication Order Number: Order/JS/YK/2025-26/32155
  • Order Date: February 2026

Impact Assessment

This order has limited immediate market impact as it pertains to historical trading activity (2014–2015). However, it signals continued SEBI enforcement resolve against illiquid stock options manipulation, a segment that saw widespread abuse by thousands of entities. The order reinforces that SEBI will pursue enforcement actions even years after the investigation period. Market participants, particularly those active in low-liquidity derivatives segments, should note the regulatory scrutiny applied to reversal trade patterns and artificial volume creation.

Impact Justification

Enforcement action against a specific entity for historical market manipulation; high severity due to fraudulent trade nature but low broader market impact as it concerns a concluded investigation into past conduct.