Description

SEBI adjudication order against Ashlar Securities Private Limited for violations related to association with TradeTron algo trading platform, including offering assured returns and non-compliance with SEBI circulars on algo trading.

Summary

SEBI’s Adjudicating Officer issued an adjudication order (No. Order/JS/YK/2025-26/32269) against Ashlar Securities Private Limited (PAN: AAHCA9621P, Registration No. INZ000203739) for alleged violations arising from its association with TradeTron (TT) and other algo trading platforms. The violations relate to algo trading strategies that offered assured returns, which is prohibited under SEBI regulations.

Key Points

  • Ashlar Securities Private Limited is a SEBI-registered stock broker (Registration No. INZ000203739) found associated with TradeTron, an algorithmic trading platform.
  • TradeTron operated as a SaaS platform facilitating algorithmic trading where strategy creators sold algo strategies to subscribers via fixed monthly fees, profit-sharing, or a combination.
  • SEBI observed that certain algo strategies on TradeTron’s website were offering assured returns, which is in violation of applicable regulations.
  • All India operations of TradeTron were handled by Neutrino Trading Pvt. Ltd., based in Mumbai.
  • The alleged violations involve 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.
  • A Show Cause Notice (Ref. No. SEBI/HO/EAD-8/AS/RM/30974/1-2/2024) was issued on October 01, 2024.
  • The Adjudicating Officer was appointed on May 20, 2025 following transfer of the erstwhile AO appointed on June 18, 2024.
  • Inquiry is being 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, with penalty provisions under Section 15HB of the SEBI Act.

Regulatory Changes

No new regulatory changes are introduced by this order. The order enforces existing regulations:

  • SEBI Circular dated September 02, 2022 (SEBI/HO/MIRSD/DOP/P/CIR/2022/117), Clause 4.2 — governing stock broker associations with algo platforms.
  • SEBI (Stock Brokers) Regulations, 1992, Schedule II, Clauses A(2) and A(5) read with Regulation 9(f) — relating to broker conduct and obligations.

Compliance Requirements

  • Stock brokers must not associate with algo trading platforms that offer or display assured/guaranteed returns to users.
  • Brokers must ensure any third-party algo platforms they are associated with comply with SEBI’s September 2022 circular on algo trading.
  • Brokers must adhere to the code of conduct prescribed under Schedule II of the SEBI (Stock Brokers) Regulations, 1992, including clauses A(2) and A(5).
  • Brokers must exercise due diligence when associating with SaaS-based algorithmic trading platforms and strategy marketplaces.

Important Dates

  • June 18, 2024: Original Adjudicating Officer appointed.
  • October 01, 2024: Show Cause Notice issued to Ashlar Securities Private Limited.
  • May 20, 2025: New Adjudicating Officer appointed following transfer of erstwhile AO.
  • March 25, 2026: Adjudication order issued.

Impact Assessment

This order signals continued SEBI enforcement action against stock brokers associated with third-party algo trading platforms that promote assured returns. While the direct impact is limited to Ashlar Securities Private Limited, it reinforces regulatory scrutiny across the broker community using platforms like TradeTron. Brokers operating with or referring clients to algo strategy marketplaces should review their associations for compliance with the September 2022 SEBI circular. The case also highlights SEBI’s focus on investor protection by targeting platforms that make misleading return guarantees in the algorithmic trading space.

Impact Justification

Enforcement action against a specific stock broker for algo trading platform violations; relevant to brokers using third-party algo platforms but limited broader market impact.