A total of 111 entities have settled pending enforcement proceedings with markets regulator Sebi under a settlement scheme introduced for stock brokers associated with certain algorithmic trading platforms.
The entities paid Rs 1 lakh each to settle the matter, according to an order passed by the Securities and Exchange Board of India (Sebi) on Wednesday.
The scheme offered brokers facing adjudication proceedings pending before the Adjudicating Officer, the Securities Appellate Tribunal, or various courts to resolve alleged violations in a time-bound and streamlined manner, in accordance with the provisions of the settlement regulations.
The scheme was initially open from June 16 to September 16. Following requests from market participants and heightened interest towards the closing period, Sebi extended the deadline until October 16, 2025.
Accordingly, 111 entities availed themselves of the scheme and remitted Rs 1 lakh each.
Some of the entities that availed the benefit are Upstox Securities, Motilal Oswal Financial Services, JM Financial Services, Nuvama Wealth and Investment Ltd (formerly known as Edelweiss Securities), Choice Equity Broking,Prabhudas Lilladher, 5 Paisa Capital, HDFC Securities, ICICI Securities, Angel One, Anand Rathi Share & Stock Brokers, Nirmal Bang Securities, Geojit Financial Services, Paytm Money.
Accordingly, Sebi has ordered that the enforcement proceedings initiated against these entities pending before various forums or authorities for the violations stand settled in terms of the scheme.
The regulator had observed that some algorithm trading strategies were displayed on certain algo platforms offering assured returns and some stock brokers registered with Sebi were associated with these algo platforms.
Therafter, Sebi conducted an examination in order to ascertain whether the association of the stock brokers with these platforms is in violation of Stock Brokers Regulations, 1992.
Pursuant to the examination, it was observed that Application Programming Interfaces of 122 stock brokers remained integrated with certain algo platforms where description of algo strategies contained guaranteed returns or consistent profit. The association of these 122 stock brokers with these algo platforms allegedly violated regulatory norms.
Accordingly, Sebi initiated adjudication proceedings against these stock brokers. Considering the large number of cases and common nature of violations and with the objective of reducing the regulatory burden, the regulator introduced the scheme.
