Description

SEBI adjudication order against Saffire Exports And Agency Private Limited for executing 36 non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, creating artificial volume of 33,48,000 units in violation of PFUTP Regulations.

Summary

SEBI issued Adjudication Order No. Order/AK/RK/2025-26/32331 against Saffire Exports And Agency Private Limited (PAN: AAECS0708A) for participating in large-scale non-genuine reversal trades in the illiquid stock options segment of BSE during the investigation period April 1, 2014 to September 30, 2015. The entity executed 36 non-genuine trades across 7 stock options contracts, contributing to artificial volume creation of 33,48,000 units.

Key Points

  • SEBI investigated large-scale reversal trades in BSE stock options that created artificial volume; 2,91,744 trades (81.40% of all trades in the segment during the investigation period) were found to be allegedly non-genuine
  • Saffire Exports And Agency Private Limited executed 36 non-genuine trades in 7 Stock Options contracts, generating artificial volume of 33,48,000 units
  • Alleged violations: Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations)
  • Show Cause Notice (SCN) bearing reference EAD-8/AS/VS/36489/2022 was issued on August 08, 2022
  • Adjudicating Officer Smt. Asha Shetty was initially appointed; the case was subsequently transferred to the undersigned AO via Order dated April 03, 2025
  • Penalty imposed under Section 15HA of the SEBI Act, 1992

Regulatory Changes

No new regulatory changes. This order applies existing provisions of the PFUTP Regulations, 2003 and Section 15HA of the SEBI Act, 1992 to penalise market manipulation through non-genuine trades.

Compliance Requirements

  • Market participants must not execute reversal trades or any trades that create artificial volumes or a false or misleading appearance of trading in securities
  • Entities must comply with Regulations 3 and 4 of SEBI PFUTP Regulations, 2003 prohibiting fraudulent and unfair trade practices
  • Participation in illiquid stock options trading through coordinated non-genuine trades is treated as market manipulation attracting monetary penalties

Important Dates

  • Investigation Period: April 1, 2014 – September 30, 2015
  • Show Cause Notice issued: August 8, 2022
  • AO transfer order: April 3, 2025
  • Adjudication Order No.: Order/AK/RK/2025-26/32331

Impact Assessment

This order is part of SEBI’s broader enforcement campaign against entities that traded in illiquid stock options on BSE and created artificial volumes. The direct market impact is limited given the historical nature of the violations (2014-2015). However, the order signals SEBI’s continued and sustained pursuit of entities involved in the illiquid stock options manipulation scheme, which implicated thousands of trades. The penalty under Section 15HA serves as a deterrent against similar manipulative trading practices.

Impact Justification

Enforcement action against a single entity for historical trades (2014-2015); no ongoing market impact but reflects continued SEBI pursuit of illiquid stock options manipulation cases.