 "SEBI")
Markets regulator Sebi on Tuesday disposed of a case related to alleged violation of Broker Regulations against OPG Securities in the matter of Prakash Constrowell.
The Securities and Exchange Board of India (Sebi) had conducted an investigation in the matters relating to the initial public offering and trading in the scrip of Prakash Constrowell Ltd (PCL) during October 04, 2011 to October 10, 2011, comprising 4 trading days. The shares of PCL were listed on BSE and NSE on October 04, 2011.
Following the investigation, the regulator observed that GKN Securities had executed self-trades in the scrip of PCL at both the exchanges during the investigation period. OPG Securities was the broker on buy as well as sell-side on all occasions of self-trades executed by GKN at BSE.
It was alleged that by acting as broker and counterparty broker for self-trades of GKN at BSE, OPG had failed to exercise due skill and care and thereby violated the Sebi (Stock Brokers and Sub-brokers) Regulations.
"The total quantity of self-trades of GKN, for which noticee (OPG) acted as a broker and counterparty broker, at BSE was 89,275 shares in 2,353 trades which was 0.27 per cent of the market volume at BSE during the investigation period.
"Further, if I calculate the percentage of self-trades of GKN in which noticee acted as broker to the combined market volume at BSE and NSE during the investigation period, it comes to 0.11 per cent," said Sebi Adjudicating Officer Prasanta Mahapatra.
The officer further said since it is not established that GKN had entered into self-trades repetitively to create artificial volume in the scrip, there is no case to draw any adverse inference on OPG as regards its role on exercise of due skill and care as stipulated under the Broker Regulations.
Accordingly, Mahapatra disposed of the allegations of violation of the Broker Regulations against OPG.
OPG Securities is also at the centre of the co-location case, which relates to some brokers allegedly getting preferential access through co-location facility at NSE, early login and dark fibre, which can allow a trader a split-second faster access to data feed of an exchange.
