Sebi slaps Rs 10 lakh fine on 2 entities for non-genuine trades

Capital markets regulator Sebi on Thursday imposed penalties amounting to Rs 10 lakh on two entities for non-genuine trades in illiquid stock options on BSE.

In two separate orders, the regulator slapped a fine of Rs 5 lakh each on Rexon Strips Ltd and Ritika Enclave Pvt Ltd.

The orders came after Sebi observed large-scale reversal trades in the illiquid stock options segment on BSE, leading to creation of artificial trade volumes.

The Securities and Exchange Board of India (Sebi) conducted a probe into the trading activity in illiquid stock options on BSE for the period April 2014-September 2015 after observing large-scale reversal of trades in the stock options segment.

Reversal trades are alleged to be non-genuine in nature as they are executed in the normal course of trading, which leads to false or misleading appearance of trading in terms of generating artificial volumes, Sebi said.

By indulging in such trades in stock options, they violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, it added.