Markets regulator Sebi has issued show cause notices to over 120 stockbrokers for their association with algo trading platform Tradetron, according to a report by NDTV Profit citing people aware of the matter. Zerodha, 5Paisa Capital, Motilal Oswal Financial Services, and Bajaj Financial Securities are part of the 122 brokerages that have received the Sebi notice.
The step is part of a Sebi investigation into potential violation of regulations by Tradetron and other algo platforms.
Tradetron, which allows users to automate trading strategies, displayed algo trading strategies promising assured returns on its website, according to Sebi. However, according to Sebi’s circular of 2022, it is prohibited to have any association with any platform that offers assured returns.
A total of 122 brokers were in violation of these regulations as they continued to have their API integrated with Tradetron, as per the report.
Many of these brokerage firms continued their association with Tradetron even after giving an undertaking to the regulator that they have discontinued their association with the platform, according to the NDTV report.
According to the report, the list of stockbrokers receiving Sebi notice include Anand Rathi Share & Stock Brokers, Geojit Financial Services, Aditya Birla Money, Angel One, ICICI Securities, Arihant Capital Markets, Ashika Stock Broking, IIFL Securities, Bonanza Portfolio, Choice Equity Broking, Hem Securities, and HDFC Securities, among others.
Kedia Capital Services, Paytm Money, Kotak Securities, JM Financial Services, Profitmart Securities, Master Capital Services, Phillip Capital (India), Samco Securities, Tradejini Financial Services, SMC Global Securities, Swastika Investmart, Sharekhan, and Prabhudas Lilladher, among others, have also received the Sebi show cause notice, according to the report.
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