SEBI Settlement Scheme: 111 Brokers Resolve Algo Trading Violations by Paying ₹1 Lakh Each
SEBI Allows Time-Bound Settlement for Algo Platform-Linked Brokers
New Delhi, March 18: A total of 111 entities have settled pending enforcement proceedings with the Securities and Exchange Board of India (SEBI) under a special settlement scheme introduced for stock brokers associated with certain algorithmic trading platforms.Each entity paid ₹1 lakh to resolve the matter, according to an order issued by SEBI on Wednesday.
Scheme Covered Cases Across Multiple Legal Forums
The settlement scheme was designed for brokers facing adjudication proceedings before the Adjudicating Officer, the Securities Appellate Tribunal, and various courts. It aimed to provide a streamlined and time-bound mechanism to resolve alleged regulatory violations in accordance with settlement regulations.Initially, the scheme was open from June 16 to September 16. However, following requests from market participants and increased interest toward the closing period, SEBI extended the deadline until October 16, 2025.
Leading Brokers Among Entities That Opted for Settlement
Among the 111 entities that availed the scheme were major market participants such as Upstox Securities, Motilal Oswal Financial Services, JM Financial Services, Nuvama Wealth and Investment Ltd, 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, and Paytm Money.Enforcement Proceedings Officially Settled
SEBI confirmed that enforcement proceedings initiated against these entities across various forums and authorities now stand settled under the provisions of the scheme.Background: SEBI Probe into Algo Platforms Offering Assured Returns
The regulator had earlier observed that certain algorithmic trading platforms were displaying strategies that promised assured returns or consistent profits. Some SEBI-registered stock brokers were found to be associated with these platforms.Following this, SEBI conducted an examination to determine whether such associations violated the Stock Brokers Regulations, 1992.
Findings: API Integration With Algo Platforms Raised Compliance Concerns
The examination revealed that the Application Programming Interfaces of 122 stock brokers were integrated with certain algorithmic trading platforms. These platforms featured strategy descriptions that indicated guaranteed returns or consistent profits.Such associations were found to be in alleged violation of regulatory norms, prompting SEBI to initiate adjudication proceedings against the brokers.
Objective: Reduce Regulatory Burden Through Uniform Resolution
Considering the large number of cases and the common nature of the violations, SEBI introduced the settlement scheme to reduce the regulatory burden and enable uniform resolution of enforcement actions.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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