SEBI v. Reliance Strategic Investments Ltd. (long-dated NIFTY put options, 2023)

Judgment entered

✓ Checked against the primary document on October 8, 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 June 2023 a SEBI adjudicating officer fined Reliance Strategic Investments Rs 7,00,000 for trading long-dated NIFTY put options with Morgan Stanley (France) SA at prices well below intrinsic value on three days in 2017, under a mutual arrangement to adjust the costs of a multi-leg position onto one strike. The counterparty had already settled.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

—

Alleged gain

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Penalty as published

700k 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 adjudication order was issued on 30 June 2023 by Soma Majumder, a SEBI adjudicating officer. The only noticee in this order is Reliance Strategic Investments Ltd. The related counterparty, Morgan Stanley (France) SA, filed a settlement application after the show cause notice and its proceedings were disposed of by a settlement order of 23 March 2023. The trades were in NIFTY options for December 2017 expiry on the National Stock Exchange.

SEBI looked at trades on 31 July, 8 August and 10 August 2017 in the 11400 put option. It alleged that the two parties negotiated the prices of a set of long-dated, deep in-the-money, illiquid index options through a trading member and then executed them so that one leg, the 11400 put, traded far from its fair price, at discounts to intrinsic value of 15 per cent, 35 per cent and 37 per cent on the three days. The purpose, SEBI said, was to adjust all the costs of running the combined positions on that single strike.

SEBI treated this as active concealment of the parties' shared understanding about fair value and as manipulation of the contract price that could mislead other traders, in breach of section 12A(c) of the SEBI Act and Regulations 3(d), 4(1) and 4(2)(e) of the PFUTP Regulations. The company replied that intrinsic value is not the right benchmark, that time value on the options was negative, that the first day's price was only about 2 per cent from fair value, that trading below fair value is not illegal, and that SEBI had produced no evidence of an arrangement.

The adjudicating officer held the violation established, noting that the traded value involved was about Rs 984 crore and that no gain, investor loss or past violation could be quantified, and imposed a penalty of Rs 7,00,000 under section 15HA. No bar or disgorgement was ordered.

The order is an administrative penalty, not a criminal judgment, and the record shows no criminal case. The record does not show whether the company appealed or paid, or the terms of the Morgan Stanley (France) settlement, which is a separate order.

This library tags the matter as price manipulation (pricing one leg of an options position away from fair value). 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. 2023-06-30 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
• 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.