Description

SEBI adjudication order against Growth Securities Private Limited for violations related to association with TradeTron algo trading platform, including offering assured returns and breaching stock broker regulations.

Summary

SEBI’s Adjudicating Officer issued an order against Growth Securities Private Limited (registration no. INZ000299236) for violations arising from its association with TradeTron (TT), an algorithmic trading platform. The examination found that TT strategies were offering assured returns, which is prohibited, and that Growth Securities was associated with the platform in breach of SEBI circular and stock broker regulations.

Key Points

  • Growth Securities Private Limited is a SEBI-registered stock broker (PAN: AABCG7715L, Reg. No. INZ000299236).
  • SEBI examined stock brokers associated with TradeTron and other algo platforms that were displaying strategies offering assured returns.
  • TradeTron is a SaaS-based algorithmic trading platform where strategy creators sell algo strategies to subscribers via fixed fees, profit-sharing, or a combination.
  • TT’s India operations were handled solely by Neutrino Trading Pvt. Ltd., Mumbai.
  • The Show Cause Notice (SCN Ref. No. SEBI/HO/EAD-8/AS/RM/31139/1/2024) was issued on October 03, 2024.
  • Alleged violations: Clause 4.2 of SEBI Circular SEBI/HO/MIRSD/DOP/P/CIR/2022/117 dated September 02, 2022, and Clauses A(2) and A(5) of Schedule II read with Regulation 9(f) of SEBI (Stock Brokers) Regulations, 1992.
  • The adjudicating officer was appointed via communiqué dated May 20, 2025 following transfer of the erstwhile AO.
  • Inquiry conducted under Section 15-I of the SEBI Act, 1992 read with Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995.
  • Penalty, if any, to be imposed under Section 15HB of the SEBI Act.

Regulatory Changes

No new regulatory changes introduced. This order enforces existing regulations:

  • SEBI Circular dated September 02, 2022 (SEBI/HO/MIRSD/DOP/P/CIR/2022/117), specifically Clause 4.2 governing stock broker conduct on algo platforms.
  • SEBI (Stock Brokers) Regulations, 1992, Clauses A(2) and A(5) of Schedule II read with Regulation 9(f), governing standards of conduct for stock brokers.

Compliance Requirements

  • Stock brokers must not associate with or facilitate algo platforms that offer or display assured/guaranteed returns.
  • Brokers must ensure any third-party algo platforms they are associated with comply with SEBI’s circular on algo trading dated September 02, 2022.
  • Brokers are required to conduct due diligence on algo platforms before association and monitor compliance on an ongoing basis.
  • Violations may result in penalty proceedings under Section 15HB of the SEBI Act.

Important Dates

  • June 18, 2024: Original AO appointed.
  • October 03, 2024: Show Cause Notice issued to Growth Securities Private Limited.
  • May 20, 2025: New AO appointed following transfer of erstwhile AO.
  • March 25, 2026: Date of this adjudication order.

Impact Assessment

This order has a focused impact on Growth Securities Private Limited and serves as a regulatory signal to all SEBI-registered stock brokers about the risks of associating with algo platforms that promise assured returns. The broader market implication is reinforcement of SEBI’s stance against unauthorized/non-compliant algorithmic trading platforms. Stock brokers using or partnering with third-party algo platforms should review their associations for compliance with SEBI’s 2022 circular. The order does not affect market-wide operations but contributes to ongoing regulatory scrutiny of the algo trading ecosystem in India.

Impact Justification

Order targets a single stock broker for algo platform association violations; relevant to algo trading compliance broadly but limited direct market impact.