Description

SEBI adjudicating officer imposes penalty on Shri Parasram Holdings Private Limited (stock broker) for violations related to association with TradeTron and other algorithmic trading platforms offering assured returns.

Summary

SEBI’s Adjudicating Officer issued Order No. Order/JS/YK/2025-26/32259 against Shri Parasram Holdings Private Limited (PAN: AAACS4487J, Registration No. INZ000220838), a registered stock broker, for violations arising from its association with TradeTron (TT) and other algorithmic trading platforms. TradeTron was found to be offering assured returns on algo trading strategies, which is prohibited under SEBI regulations. The order was issued under Section 15-I of the SEBI Act, 1992 read with Rule 5 of the SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995.

Key Points

  • Shri Parasram Holdings Private Limited is a SEBI-registered stock broker (INZ000220838) found associated with TradeTron, an algo trading platform.
  • TradeTron (TT) is a Software as a Service (SaaS) platform enabling algorithmic trading where strategy creators sell algo strategies to subscribers via fixed monthly fees, profit-sharing, or a combination.
  • SEBI’s examination found that certain algo strategies on TT’s website were offering assured/guaranteed returns, violating SEBI norms.
  • The noticee was alleged to have violated Clause 4.2 of SEBI Circular SEBI/HO/MIRSD/DOP/P/CIR/2022/117 dated September 02, 2022.
  • Additional violations alleged under Clauses A(2) and A(5) of Schedule II read with Regulation 9(f) of SEBI (Stock Brokers) Regulations, 1992.
  • Show Cause Notice Ref. No. SEBI/HO/EAD-8/AS/RM/31167/1/2024 dated October 01, 2024 was issued to the noticee.
  • TT’s India operations were handled solely by Neutrino Trading Pvt. Ltd., Mumbai.
  • The AO was appointed vide communiqué dated May 20, 2025 following transfer of the erstwhile AO appointed on June 18, 2024.

Regulatory Changes

No new regulatory changes introduced. The order enforces existing provisions:

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

Compliance Requirements

  • Stock brokers must not associate with or facilitate algo trading platforms that offer assured or guaranteed returns to investors.
  • Brokers are required to ensure third-party algo platforms they engage with comply with SEBI’s September 2022 circular on algorithmic trading.
  • Brokers must adhere to the code of conduct under Schedule II of the Stock Brokers Regulations, including obligations of integrity (A(2)) and not making misleading claims (A(5)).
  • Brokers using SaaS-based algo platforms must conduct due diligence on strategy disclosures made to clients.

Important Dates

  • September 02, 2022: SEBI Circular (SEBI/HO/MIRSD/DOP/P/CIR/2022/117) governing algo platform conduct issued.
  • June 18, 2024: Original AO appointed in this matter.
  • October 01, 2024: Show Cause Notice issued to Shri Parasram Holdings Private Limited.
  • May 20, 2025: New AO appointed following transfer of erstwhile AO.
  • March 25, 2026: Adjudication order issued.

Impact Assessment

This order is part of SEBI’s broader enforcement action against stock brokers associated with TradeTron and other algo platforms that promoted assured return strategies. The impact is primarily on:

  • Stock brokers: Reinforces strict liability for broker associations with non-compliant algo platforms; brokers must actively monitor third-party platform disclosures.
  • Algo platform ecosystem: Continued regulatory scrutiny discourages platforms from offering or implying guaranteed returns.
  • Retail investors: Protective in intent — SEBI’s enforcement aims to curb misleading algo strategy marketing.
  • Market-wide impact is limited as the order concerns a single broker, but the precedent contributes to a series of similar enforcement actions across the algo trading space.

Impact Justification

Order targets a single stock broker for algo platform compliance violations; relevant to brokers using third-party algo platforms but limited broader market impact.