Description

SEBI adjudication order against SIC Stocks Services Private Limited for executing non-genuine reversal trades in illiquid stock options on BSE during April 2014 to September 2015, creating artificial trading volumes.

Summary

SEBI’s Adjudicating Officer issued an order against SIC Stocks Services Private Limited (PAN: AAHCS8176P) for alleged participation in non-genuine reversal trades in the illiquid stock options segment of BSE. The investigation covered the period April 1, 2014 to September 30, 2015, during which SEBI found that 81.40% of all trades (2,91,744 trades) in BSE’s stock options segment were allegedly non-genuine. SIC Stocks Services executed 12 such non-genuine trades across 2 stock options contracts, resulting in artificial volume of 1,36,000 units.

Key Points

  • SEBI investigated large-scale reversal trades in BSE’s stock options segment for the period April 1, 2014 to September 30, 2015
  • 2,91,744 trades comprising 81.40% of all trades in BSE stock options during the investigation period were allegedly non-genuine
  • SIC Stocks Services Private Limited executed 12 non-genuine trades in 2 stock options contracts, generating artificial volume of 1,36,000 units
  • Violations alleged under PFUTP Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a)
  • Show Cause Notice was originally issued on August 02, 2022
  • The adjudicating officer was transferred; undersigned AO appointed via order dated May 13, 2025
  • Order number: Order/AK/GN/2026-27/32367 under Section 15-I of the SEBI Act, 1992

Regulatory Changes

No new regulatory changes introduced. This order applies existing SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (PFUTP Regulations) to penalise historical violations.

Compliance Requirements

  • Entities must refrain from executing reversal trades or any trades designed to create artificial volume in stock options or any other segment
  • Market participants must comply with PFUTP Regulations 3(a), (b), (c), (d), 4(1), and 4(2)(a), which prohibit manipulative, deceptive, and fraudulent trading practices
  • Entities subject to SCNs must respond and engage with SEBI adjudication proceedings

Important Dates

  • Investigation Period: April 1, 2014 – September 30, 2015
  • Show Cause Notice issued: August 02, 2022
  • SEBI Settlement Scheme, 2022: referenced in Part-B of the 1st PSI accompanying the SCN
  • AO transfer order: May 13, 2025
  • Adjudication Order: April 2026 (Order No. Order/AK/GN/2026-27/32367)

Impact Assessment

This order is part of SEBI’s broader enforcement sweep against entities involved in illiquid stock options manipulation on BSE between 2014 and 2015. The direct market impact is limited as the violations are historical. However, the order reinforces SEBI’s continued pursuit of manipulation cases regardless of the time elapsed and signals that entities involved in artificial volume creation face penalties under Section 15HA of the SEBI Act. No stocks of currently listed companies are directly implicated in this specific order.

Impact Justification

Enforcement action against a single entity for historical violations (2014-2015); part of a broader SEBI investigation into illiquid stock options manipulation on BSE. Penalty is entity-specific with no broader market rule changes, limiting current market impact.