Sebi offers settlement scheme for brokers who associated with unregulated algo platforms

The scheme would provide a settlement opportunity to such stock brokers associated with certain algo platforms against whom proceedings have been initiated by Sebi and are pending before an authority or forum.

By availing the scheme, stock brokers may settle proceedings against them and seek expeditious conclusion, the notice said. The actions initiated against the stock brokers who do not avail this opportunity for settlement shall be continued against them in accordance with law, said Sebi.

Last year, Sebi had issued show-cause notices to more than 110 stock brokers, including major players like Zerodha, 5Paisa Capital and Motilal Oswal Financial, after observing that unregulated platforms were offering algo-based trading strategies marketed with claims of assured returns. Platforms like Tradetron facilitated these trades by linking their algorithms to broker systems despite Sebi’s explicit directives against such associations.

As the violations were more of an industry-wide practice than a major infraction, Sebi is likely to notify a lower settlement amount possibly of Rs 1 lakh for each case under the scheme.