Adjudication Order in respect of Akash in the matter of dealings in Illiquid Stock Options on BSE

Description

SEBI adjudication order imposing penalty on Akash for executing non-genuine reversal trades in Illiquid Stock Options on BSE during April 2014 to September 2015, violating PFUTP Regulations.

Summary

SEBI’s Adjudicating Officer issued an order (Order/JS/YK/2025-26/32197) against Akash (PAN: BLLPA5954N) for alleged participation in 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 create artificial volumes and portray a false or misleading appearance of trading activity, in violation of SEBI’s Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003.

Key Points

• SEBI investigated large-scale reversal trades in Illiquid Stock Options (ISO) on BSE for the period April 1, 2014 to September 30, 2015.
• A total of 2,91,643 trades comprising 81.38% of all trades in BSE’s stock options segment were identified as reversal trades involving buy-sell position reversals with the same counterparty.
• 14,720 entities were found to have executed non-genuine trades during the investigation period; Akash was one of them.
• The noticee’s trades were alleged to be manipulative and deceptive, creating artificial volume in stock options contracts.
• Adjudication proceedings were initiated for alleged violations of Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a) of SEBI (PFUTP) Regulations, 2003.
• The AO was appointed on April 4, 2025 following transfer from the erstwhile Adjudicating Officer.
• A Show Cause Notice was originally issued on April 4, 2022.

Regulatory Changes

No new regulatory changes introduced. This order pertains to enforcement of existing provisions under:

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

Compliance Requirements

• Market participants must refrain from executing reversal trades or any non-genuine trades designed to create artificial volumes or misleading appearances of trading activity.
• Entities must comply with PFUTP Regulations prohibiting fraudulent, manipulative, and deceptive trading practices in securities markets.

Important Dates

• April 1, 2014 – September 30, 2015: Investigation period for illiquid stock options trading on BSE.
• April 4, 2022: Show Cause Notice issued to the noticee.
• April 4, 2025: New Adjudicating Officer appointed following case transfer.

Impact Assessment

This is an individual enforcement action with limited direct market impact. It forms part of a broader SEBI crackdown on manipulation in illiquid stock options on BSE, affecting one of 14,720 entities identified in the investigation. The order reinforces SEBI’s continued pursuit of historical market manipulation cases and serves as a deterrent against non-genuine trading practices. No systemic or forward-looking market implications are expected from this individual order.

Impact Justification

Individual enforcement action against a single entity for historical violations (2014-2015) in illiquid stock options; no forward-looking regulatory changes or broad market impact.