SEBI v. Morgan Stanley France S.A. (box trades in long-dated Nifty options, settlement, 2023)

Settled

✓ Checked against the primary document on October 9, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, in a single reading of the order; an independent second reading of 60 SEBI records agreed on every field for 56, the four misses being penalty amounts; a later sample of 50 of the SEBI records added on 9 October agreed on every field for 46. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In March 2023 SEBI settled with Morgan Stanley France for Rs 25.35 lakh over allegations that it and Reliance Strategic Investments traded long-dated Nifty options in 2017 at a prearranged discount, moving the price of one leg. It neither admitted nor denied, and also agreed to recover the money from an officer in default.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

—

Total relief

—

Alleged gain

—

Penalty as published

2.5m INR

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars. This regulator states penalties in INR. The figure is recorded as published and is not converted, so it does not appear in the USD totals or medians used elsewhere on this site.

What is alleged to have happened

This settlement order of 23 March 2023 was made by SEBI adjudicating officer Soma Majumder. The applicant is Morgan Stanley France S.A. SEBI had also investigated the other side of the trades, Reliance Strategic Investments Ltd, and the order concerns only the applicant.

SEBI examined box trades, combinations of long-dated deep in-the-money Nifty options expiring on 28 December 2017, done on NSE on 31 July, 8 August and 10 August 2017. It alleged that the call options traded within about 1 percent of intrinsic value while the 11400 put leg traded at a discount of 15, 35 and 37 percent, because the counterparties had agreed to put all their costs on that one strike, that they knew this was not the right price, and that this was an active concealment and a manipulation of the put price that could mislead others. The charge was a breach of section 12A(c) of the SEBI Act and PFUTP Regulations 3(d), 4(1) and 4(2)(e).

The applicant applied to settle in February 2022, without admitting or denying the findings of fact or conclusions of law. After SEBI's committees reviewed revised terms, the applicant paid Rs 25,35,000 on 1 March 2023. It also accepted an extra, non-monetary term requiring it to recover that sum from the officer in default, so that investors were not penalised, and to file a compliance letter. The adjudication proceedings were disposed of.

The order leaves SEBI free to revive the case if representations prove untrue or undertakings are broken.

The record does not show the size of the positions, any gain or loss, or what became of the proceedings against the other party.

This library tags the matter as price manipulation, because the allegation is of a prearranged, off-fair-value price on one leg of the trade. No finding was made. The tagging is ours, not the regulator's.

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the order.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Price manipulation — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2023-03-23 SEBI order

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEBI order
• SEBI order (PDF)

The linked release is published by the issuing regulator under its own terms. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added October 8, 2026. submit a correction.