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Adjudication proceedings have been initiated against 567 entities involved in such trades in the first phase, according to a Sebi order dated April 5.
The markets regulator came across violations by 14,720 entities, while it was probing 59 entities in a case related to alleged trading irregularities in the stock options segment of the BSE. With regard to 59 entities, Sebi had initiated a preliminary examination in the matter of illiquid stock options for the period from April 1, 2014, to March 31, 2015, during which, it was noticed that the entities were repeatedly incurring significant losses by executing reversal trades in the stock options segment of the BSE.
Another set of entities were repeatedly making significant profits by becoming their counter-parties in orchestrated trades with a common objective of intended execution of the non-genuine trades.
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Through an interim order in August 2015, Sebi had restrained the 59 entities from the securities markets till further directions. The interim directions were confirmed by other orders in July 2016 and August 2016 after providing “certain relaxations”.
Later, the scope of investigation was expanded to cover all the entities that had indulged in executing reversal trades in BSE’s Stock Options segment.