SEBI orders investigation into Pace Stock Broking's alleged front-running of Axis Mutual Fund trades

This order addresses SEBI's investigation into allegations that Pace Stock Broking Services Private Limited engaged in front-running of trades belonging to Axis Mutual Fund between April 2020 and March 2022. It also examines the firm's failure to maintain required IP address and user ID logs as mandated by regulations.

Pace Stock Broking Services Private Limited (the Noticee); Mr. Kaleeswaran Pandian (dealer/client); Axis Mutual Fund (the affected fund).

• SEBI investigated trades for the period April 01, 2020, to March 31, 2022.
• SEBI alleged violations of Regulations 9(b) and 9(f) of the SEBI (Stock Brokers) Regulations, 1992, and the Code of Conduct for Stock Brokers.
• SEBI alleged that Pace failed to provide IP addresses mapped to specific user IDs for proprietary orders.
• SEBI noted that trades executed under a specific CTCL ID were attributed to Mr. Kaleeswaran Pandian in exchange records, while Pace claimed they were executed by Mr. Rajeev Ranjan due to a clerical error.
• The order cites trading volumes of approximately 1.24 crore shares (buy/sell) for the specific dealer in question.
• SEBI initiated adjudication proceedings under Sections 15A(a), 15A(c), and 15HB of the SEBI Act.

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