Latest news with #KamleshVarshney
Mint
07-07-2025
- Business
- Mint
Sebi wants to review and rename ‘penalties' to avoid stigmatising brokers
Kamlesh Varshney, whole-time member of the Securities and Exchange Board of India (Sebi) said on Monday that the regulator is looking to overhaul the penalties it imposes on market intermediaries. He suggested that many such actions are wrongly labelled as penalties unfairly stigmatising brokers, and that the regulator was close to completing the first phase of a penalty rationalisation framework. 'Some of the big initiatives that have been planned for future are, number one, rationalisation of penalties,' Varshney said. 'We had a meeting in February in Delhi with all the brokers, at which NSE was also present. There we outlined a few of our objectives. Number one was: how do we rationalise penalties, and can we have only one exchange designated for imposing them. [Another] important point was whether should we call it penalty.' He explained that in many cases, the sums were not actually penalties. "This creates unnecessary stigma on the broker,' he added. Varshney also said that the Brokers' Industrial Standard Forum had worked on this problem in the past five months and had found a solution, adding 'the first phase of this rationalisation should happen very soon'. Varshney said that apart from rationalising penalties, the regulator was also consulting market institutions on the possibility of having a common reporting portal. "Instead of brokers reporting their transactions at different exchanges, can we have a common portal? That work is also in progress,' he said. Varshney was addressing an audience at the launch of the proxy advisory recommendations feature on the e-voting system in the investor app, a move designed to strengthen investor participation in corporate governance. The feature integrates research-backed recommendations from proxy advisory firms directly into the e-voting platform used by retail investors. "By offering independent, research-based insights on shareholder resolutions, proxy advisory firms facilitate more informed decision-making—particularly for retail investors who may lack resources for in-depth analysis", Sebi chief Tuhin Kanta Pandey said while launching the feature. On the sidelines of the event, Pandey answered queries about Sebi's recent action against American trading firm Jane Street. Asked if more firms were under the regulator's lens, he said, 'It is basically a surveillance issue and surveillance at a high level. We will continue and upgrade those surveillance measures. I don't think there are many other risks.' On whether the case would prompt Sebi to review its optimisation of regulations, the Sebi chief reiterated that enforcement and surveillance, rather than more regulation, were the need of the hour. "Excess regulation does not mean excess surveillance. These are two different things,' he said.
News18
29-04-2025
- Business
- News18
SEBI Cracks India's First Major Spoofing Case Involving 173 Stocks And A Broker
Last Updated: SEBI has ordered PWAPL to disgorge over Rs 3.22 crore in illegal gains after unearthing a large-scale spoofing operation; What is spoofing? In a landmark move, the Securities and Exchange Board of India (SEBI) has ordered Patel Wealth Advisors Pvt Ltd (PWAPL) and its associates to disgorge over Rs 3.22 crore in illegal gains after unearthing a large-scale spoofing operation—a manipulative trading practice used to create false demand in stocks. SEBI has barred PWAPL from trading in the securities market through its proprietary account. Additionally, the company's directors have been prohibited from accessing the market, marking one of the most significant enforcement actions in India against this kind of market manipulation. The regulator's order, issued on April 28, revealed that PWAPL's spoofing activities were not only extensive but also spread across both the cash and derivatives segments, a first for India in terms of scale. SEBI's investigation found that spoofing occurred in 173 scrips over 292 trading days, with 621 unique instances—sometimes multiple times in a single session—between April 2019 and March 2022. What is Spoofing? Spoofing is a deceptive trading tactic that involves placing large orders (buy or sell) on one side of the order book without the intention of executing them. These phantom orders, placed well below or above the market price, create the illusion of strong demand or supply. This misleads other investors, prompting them to trade, after which the spoofer cancels the original orders and profits by executing trades on the opposite side. SEBI Whole-Time Member Kamlesh Varshney explained: 'Order spoofing is a manipulative practice where traders place and then cancel large buy or sell orders to mislead the market. This artificial pressure on the order book distorts market prices and induces unsuspecting investors to take positions, allowing the spoofer to profit from the resulting price movement." Varshney emphasised the urgency of passing an interim order due to PWAPL's repeated manipulation on both the buy and sell sides. 'Allowing PWAPL to continue these spoofing activities would severely erode the integrity of the securities market and harm investors," he noted. He further called spoofing a 'fraudulent and unfair trade practice" that deceives other market participants and undermines price discovery and market efficiency. While SEBI had previously flagged a smaller spoofing case involving Nimi Enterprises in 2023, that incident was limited to the cash segment and spanned only eight months. The PWAPL case marks the first major crackdown involving both market segments and a significantly larger footprint.
