At the hearing in September 2023, the Tribunal directed that if a new settlement regime is introduced in future, the appellant will be eligible to avail the benefits thereof and that such regime will also be applicable to the appellant’s case.
Therefore, the Securities and Exchange Board of India (SEBI) has introduced the ‘ISO Settlement Regime 2024’ to provide opportunity to entities where proceedings have been initiated and appeals against proceedings are pending before a forum or authority.
The scheme was initially scheduled to run from March 11 to May 10, but has been extended till June 10, considering the interest of a large number of organisations to avail the benefit.
“A total of 768 entities have benefited from the scheme and paid the specified settlement amount and litigation costs respectively,” the Securities and Exchange Board said in its settlement order. Most of the entities paid Rs 12 lakh or Rs 24 lakh as settlement costs. In response, the Securities and Exchange Board said, “Any proceedings initiated in respect of the violations and pending before any court or authority shall be settled by the applicants (768).” As part of its surveillance, the Securities and Exchange Board recorded several instances of transactions by a set of entities trading in the options segment of certain stocks listed on the BSE. These transactions appeared to be unusual as they consistently resulted in large losses and were reversed on the same or the next day with the same set of counterparties.
The regulator conducted an analysis of the BSE stock option sector from April 1, 2014 to September 30, 2015, which observed that while a few companies were sustaining significant losses through trading, a few other companies were sustaining significant profits by executing reversal transactions on the BSE stock option sector.
It has been observed that trading in illiquid options on certain stocks is taking place in the F&O segment of the BSE.
Further, it was noted that out of 21,652 entities that executed transactions in the BSE stock options segment, 14,720 entities were involved in generating artificial trading volume by executing fraudulent transactions or reversal transactions on the same day in violation of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.
