SEBI Resolves 111 Brokerage Firm Cases Involving Algo Platform Violations Under 2025 Settlement Scheme

SEBI Settles Enforcement Proceedings Against 111 Stockbrokers

Key Highlights

• SEBI has settled enforcement proceedings against 111 stockbrokers associated with algorithmic trading platforms that allegedly promised assured returns.
• Total settlement amount: Rs 1.11 crore (approximately $1.3 million USD).
• Each of the 111 brokers paid a settlement amount of Rs 1 lakh (approximately $1,200 USD).

Background The enforcement proceedings stemmed from an examination into certain algorithmic trading platforms that made claims of "guaranteed returns" or "consistent profits." The Securities and Exchange Board of India (SEBI) found that the application programming interfaces (APIs) of 122 registered stock brokers were integrated with these platforms, raising concerns over violations of regulatory norms.

Settlement Scheme To address the large number of similar cases and reduce regulatory burden, SEBI introduced the 'Settlement Scheme on Association with Certain Algo Platforms, 2025' under Section 15JB of the SEBI Act. The scheme allowed eligible brokers to settle pending proceedings by paying a prescribed settlement amount without admission or denial of guilt. The scheme was initially open from June 16 to September 16, 2025, and was later extended until October 16, 2025.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Participating Brokers The list of entities that opted for the scheme includes a wide spectrum of the broking industry, from large players such as Zerodha, ICICI Securities, HDFC Securities, and Angel One to mid-sized and regional brokers.

Regulatory Action In its order, SEBI stated that it shall not continue the proceedings already initiated and will not initiate any further action for the specified violations. However, the regulator clarified that the settlement is subject to certain conditions and can be revoked if any misrepresentation is discovered or if settlement terms are breached.

Impact The regulator's action highlights its continued scrutiny of the rapidly growing algorithmic trading ecosystem, particularly platforms that cater to retail investors. The settlement order underscores SEBI's intent to enforce rules while using settlement mechanisms to efficiently resolve enforcement backlogs.