SEBI has issued a circular levying heavy penalty on any trade change (w.e.f. 01.08.11) without any threshold limit on the number of orders or the amount. The minimum penalty is 1% of trade value and this could go up to 2% depending on the value of trades changed. There are also strict instructions to Exchanges and Internal Auditors to report any trade change in their Inspection report and Internal Audit Reports respectively and they have been directed to investigate each and every trade change for their genuineness.
Hence, you are requested to exercise extra care while giving orders to dealers for executing trades to avoid errors. If required, please repeat Scrip name, Quantity to Buy or Sell and the rate, very clearly to the dealer. The penalty and consequent profit/loss will have to be borne by the erring party. To give an example of quantum of penalty, if there is an error in a trade of Rs. 5 lacs the amount of penalty would be minimum of Rs. 5,000/- and that could go up to Rs. 10,000/- for an error, depending on the % of change in trades. The circular of SEBI is enclosed herewith for your ready reference.
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