Stockbroker company's appeal against registration suspension reduced to 10 days for stockbroker & FUTP violations

The appellant, a stockbroker company, appealed against the suspension of its registration certificate for three weeks due to violations of stockbroker and FUTP regulations. The appellant was found guilty of executing fictitious trades, leading to manipulation in trading activities. The Tribunal upheld the suspension but reduced the period to ten days, considering only a small percentage of trades were in violation. The appeal was disposed of with no costs awarded.

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Issues involved: Alleged violation of stockbroker regulations and FUTP regulations leading to suspension of certificate of registration.

Summary:
The appellant, a private limited company registered as a stockbroker with the Securities and Exchange Board of India, appealed against the suspension of its certificate of registration for three weeks due to alleged violations of stockbroker regulations and FUTP regulations. The charges included aiding and abetting a client in influencing the price of a scrip and executing fictitious trades. The appellant was found guilty based on an enquiry report and the whole time member suspended the certificate of registration for three weeks. The appeal was made against this decision.

Upon hearing arguments from both parties, it was established that the appellant executed three fictitious trades on behalf of a client, where the buyer and seller were the same entity. The appellant contended that the trades were legitimate and part of normal trading activities. However, it was clarified that the trading system matches buy and sell orders based on price time priority and demand and supply principles. The appellant's actions were deemed to be artificial and manipulative, leading to a suspension of the certificate of registration.

The Tribunal upheld the suspension but reduced the period to ten days, considering that only three out of 53 trades executed by the appellant were found to be in violation. The appeal was disposed of with no costs awarded.

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