Market regulator Securities and Exchange Board of India (SEBI) is now preparing such advanced tools which will be able to detect incidents of market manipulation earlier and faster. This information has been given by SEBI Chairman Tuhin Kanta Pandey.
“We are now moving from reactive supervision to predictive oversight in the field of surveillance,” he said at an event at BSE Brokers Forum (BBF) on Saturday. We have completely updated our data warehouse system to detect pump-and-dump activities with new rule-based alerts. This will also help in detecting fraudulent trades taking place in big deals.
SEBI Chief said that pump-and-dump schemes follow a pattern, which can be traced. This thing has been seen in many orders of SEBI. With the new technology, such cases will be identified in advance through data-based analysis. This means that it will be easier for SEBI to take quick action.
Safety net for DPs
SEBI is now creating a safety net mechanism for depository participants (DPs) also. Pandey said, ‘We are also considering bringing a new system. With this, if there is any technical problem or outage in any DP, it can be handled at the depository level. Just like there are security arrangements for stock brokers.
Reforms in derivatives market
On the issue of weekly expiry in derivatives i.e. Futures and Options (F&O), SEBI Chief said that the market regulator has already taken several regulatory steps based on data analysis. He said, ‘We will take the same steps thoughtfully and with consultation in future too, so that the market improves and investors are protected.’
Focus on cash market and SLBM
Pandey said that the daily trading volume of the cash equity market has doubled in the last three years to more than Rs 1 lakh crore. This is the foundation of capital formation. He said, ‘We have to give more depth to this market. Also, the Security Lending and Borrowing Mechanism (SLBM) framework will have to be reviewed according to risk management.
Easy KYC for NRIs
The SEBI chief said that work is also going on to simplify the KYC process for NRI investors. SEBI, along with UIDAI and RBI, is creating a system through which NRIs can do remote KYC without coming to India. Pandey said, ‘It is currently in the testing stage and our aim is to launch it soon.’
Emphasis on FPI registration and innovation
Pandey said that SEBI wants to further simplify the registration process of foreign portfolio investors (FPIs). He said, ‘FPI registration is our window to connect with the world. If cobwebs get stuck on it, it will not shine. He also appealed to the industry to innovate to promote new products and small SIPs. SEBI Chief said, ‘SEBI will continue to focus on providing more investment options to investors according to their risk appetite.’
Reforms on commodity markets and taxation
Talking about the commodity market, Pandey said that there is still a lot of potential in many commodity segments of India. He said, ‘Many issues related to taxation, delivery system and GST will have to be resolved. Working groups have been formed for this, and after their recommendations we will move forward.
Improvement in rules for brokers
Pandey said that SEBI is also working on making the rules simpler and less expensive for stock brokers. He said, ‘We have received many suggestions, and we will take this proposal to the board for approval by September.’
Strictness on finfluencers and cyber fraud
SEBI Chairman said that protection of investors from cyber frauds and unregistered financiers will remain the priority of SEBI. In this direction, SEBI is working closely with market institutions and intermediaries.
In the end, SEBI Chief said, ‘We all should be proud that we have created a strong market. Now it is our responsibility to make this growth sustainable. We have to build not only successful businesses but also strong institutions.
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