SEBI’s Adjudication Order in respect of Nilesh
Kapadia, Dharmesh Shah, Ashok Nayak and IKAB Securities and Investment Ltd. in
the matter of Front-running the trades of HDFC AMC
Kapadia, Dharmesh Shah, Ashok Nayak and IKAB Securities and Investment Ltd. in
the matter of Front-running the trades of HDFC AMC
The regulator levied a fine of Rs 50 lakh each
on Nilesh Kapadia and Dharmesh Shah, Rs 40 lakh on Ashok Nayak and Rs 60 lakh
on IKAB Securities and Investments Ltd.
on Nilesh Kapadia and Dharmesh Shah, Rs 40 lakh on Ashok Nayak and Rs 60 lakh
on IKAB Securities and Investments Ltd.
Sebi on Thursday imposed a penalty totalling Rs
2 crore on four entities in HDFC Asset Management Company (AMC) front-running
case.
2 crore on four entities in HDFC Asset Management Company (AMC) front-running
case.
In November 2019, the regulator had levied a
fine of Rs 25 lakh on Kapadia for misusing his position in the capacity of HDFC
AMC dealer.
fine of Rs 25 lakh on Kapadia for misusing his position in the capacity of HDFC
AMC dealer.
What is Front-Running ?
Front-running refers to an unethical practice
by someone trading in shares on the basis of advance information given by a broker,
analyst or other executive at a market intermediary before the trades are
conducted by that entity.
by someone trading in shares on the basis of advance information given by a broker,
analyst or other executive at a market intermediary before the trades are
conducted by that entity.
Front-running is when a broker or other entity
enters into a trade because they have foreknowledge of a big non-publicized
transaction that will influence the price of the asset, resulting in a likely
financial gain for the broker. It also occurs when a broker or analyst buys or
sells shares for their account ahead of their firm's buy or sell recommendation
to clients.
enters into a trade because they have foreknowledge of a big non-publicized
transaction that will influence the price of the asset, resulting in a likely
financial gain for the broker. It also occurs when a broker or analyst buys or
sells shares for their account ahead of their firm's buy or sell recommendation
to clients.
Front-running is also known as tailgating.
Front-running is illegal and unethical because it takes advantage of private
information that is not available to the public. If a big transaction is made
public, then buy or selling ahead of it is not illegal.
Front-running is illegal and unethical because it takes advantage of private
information that is not available to the public. If a big transaction is made
public, then buy or selling ahead of it is not illegal.
How it Woked in HDFC AMC Trades?
During the investigation period of October 2006
to June 2007, Kapadia, who was equity dealer with HDFC AMC between June 2000 to
2010, tipped Dharmesh Shah regarding impending HDFC AMC trades, Sebi noted.
to June 2007, Kapadia, who was equity dealer with HDFC AMC between June 2000 to
2010, tipped Dharmesh Shah regarding impending HDFC AMC trades, Sebi noted.
Dharmesh Shah in turn facilitated 109 instances
of front-running the trades of HDFC AMC.
of front-running the trades of HDFC AMC.
These front-running trades were executed in
trading accounts of Nayak and Bankim Shah, one of the dealer of IKAB Securities
and Investments, among others.
trading accounts of Nayak and Bankim Shah, one of the dealer of IKAB Securities
and Investments, among others.
Distortion of Market
SEBI further said that the four entities
actually "distorted the market for the said shares, by causing
premeditated non-genuine trades to take place with profits for the traders (at
the cost of HDFC Mutual Fund and its investors as well as ordinary general
investors) which were nearly guaranteed on account of confidential information
selectively available to them."
actually "distorted the market for the said shares, by causing
premeditated non-genuine trades to take place with profits for the traders (at
the cost of HDFC Mutual Fund and its investors as well as ordinary general
investors) which were nearly guaranteed on account of confidential information
selectively available to them."
Violations of PFUTP Provisions
By indulging in such activities, the entities
violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade
Practices) norms and accordingly, the regulator levied fine on them.
violated the provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade
Practices) norms and accordingly, the regulator levied fine on them.
LATEST GST NOTITIFICATION 60 & 61 /2020
Dated 30-07-2020 AND AMENDMENT
Dated 30-07-2020 AND AMENDMENT
“FORM GST INV – 1
(See Rule 48)
Format/Schema for e-Invoice
In the Central Goods and Services Tax Rules,
2017, for FORM GST INV-01, the following
2017, for FORM GST INV-01, the following
form shall be substituted, namely:-
“FORM GST INV – 1
(See Rule 48)
Format/Schema for e-Invoice
================================
Central Board of Indirect Taxes and Customs
Notification No. 61/2020 – Central Tax
New Delhi, the 30th July, 2020
G.S.R.....(E).—In exercise of the powers
conferred by sub-rule (4) of rule 48 of the Central
conferred by sub-rule (4) of rule 48 of the Central
Goods and Services Tax Rules, 2017, the
Government, on the recommendations of the Council,hereby makes the following
amendments
Government, on the recommendations of the Council,hereby makes the following
amendments
In the said notification, in the first
paragraph,
paragraph,
(i) before the words “those referred to in
sub-rules”, the words “a Special Economic Zone unit and” shall be inserted;
sub-rules”, the words “a Special Economic Zone unit and” shall be inserted;
(ii) for the words “one hundred crore rupees”,
the words “five hundred crore rupees” shall be substituted
the words “five hundred crore rupees” shall be substituted
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