Front Running

Front running is the illegal and unethical practice in financial markets where a broker, trader, or market intermediary — who has advance knowledge of a large pending client order that is likely to move the market — executes trades in the same security for their own account before executing the client's order, profiting from the anticipated price movement caused by the client's trade. For example, if a broker knows a large institutional buy order for a stock is about to be placed, they may purchase shares in that stock first, then execute the client's order (which pushes the price up), and subsequently sell their own shares at a profit. Front running is a serious breach of fiduciary duty and a market manipulation offence regulated by SEBI in India under the SEBI Act and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations. For market participants on Ventura Securities, understanding front running and reporting any suspected instances to SEBI through the SCORES platform is an important element of market integrity and investor protection.