New Delhi, March 18 A total of 111 entities have settled pending enforcement proceedings with the market 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 before the Adjudicating Officer, the Securities Appellate Tribunal, or various courts, the opportunity 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 increased interest towards the closing period, Sebi extended the deadline until October 16, 2025.
Accordingly, 111 entities availed 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 before various forums or authorities for the violations stand settled in terms of the scheme.
The regulator had observed that some algorithmic trading strategies were displayed on certain algo platforms offering assured returns, and that some stock brokers registered with Sebi were associated with these algo platforms.
Subsequently, Sebi conducted an examination to ascertain whether the association of the stock brokers with these platforms was in violation of the Stock Brokers Regulations, 1992.
Following the examination, it was observed that the Application Programming Interfaces (APIs) of 122 stock brokers remained integrated with certain algo platforms where the description of the 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 the common nature of the violations, and with the objective of reducing the regulatory burden, the regulator introduced the scheme.