Mumbai: SEBI Chairman Tuhin Kanta Pandey on Saturday said trades in secondary markets are under SEBI’s surveillance on a daily basis, and alert systems have been put in place to detect suspicious patterns of trading.
“SEBI ensures that market participants are adequately supervised. However, egregious behaviour of intermediaries with respect to client assets cannot be ruled out, and cannot be tolerated,” SEBI chief emphasised.
“In a dynamic and complex security market, maintaining market integrity is a continuing challenge. Safety of assets and transparency of information are paramount for investors, big and small. Any lack of confidence will move them towards unregulated markets. Similarly, market intermediaries, who handle these assets for the investors, must have faith that they will have equal access to the markets, price discovery will be fair and market abuse will be curbed.
“SEBI has embraced the use of latest technology and data analytics to detect market misconduct, such as, insider trading, front running, price manipulation and financial statement frauds. SEBI has been regularly taking various initiatives towards protection of client assets, as asset safety is important for investors to have confidence in the markets. Another important aspect of maintaining market integrity is to ensure that market participants are not only aware of their compliance requirements but also know how to ensure compliance,” Pandey told an investment summit here.
The market regulator has successfully teamed up with the infrastructure institutions and market intermediaries to build robust market integrity. SEBI’s initiatives in this regard span a wide range-regulations, technology, supervision, surveillance, enforcement, investor awareness and resolution of investor grievances.
SEBI, Pandey said, has taken several steps to strengthen its investigation and inspection process by building capacity within internal teams and by relying on technology for obtaining data and analyzing the same. The improvement in strength of SEBI’s investigation and enforcement process can be gauged from the fact that more entities are now filing for settlement rather than litigating the matter and the settlement proportion has increased to 40 per cent.
“The increasing spread of misleading content on stock markets on various social media platforms leads to a lot of gullible investors putting their savings into investments which do not meet their risk profile. SEBI has been monitoring social media platforms to identify such misleading content and has successfully worked with respective platforms to take down such content before the damage is widespread,” SEBI chief underlined.
Stock markets are changing rapidly, and it has to be ensured that investors keep pace with this change. SEBI’s role in building investor awareness and education is very crucial. “We intend to work with the entire market ecosystem to launch a more comprehensive awareness program for investor awareness including on the pernicious cyber-frauds and risks,” Pandey added.
SEBI has put in place a grievance redressal facilitation mechanism for investors. This mechanism-SEBI complaint redressal system-has been recently revamped, and has significantly reduced the time taken to resolve grievances. The online dispute resolution system, utilizing processes such as mediation and arbitration, has been put in place to resolve grievances. As on date, around 5600 disputes have been resolved with the claim value of around Rs 390 crore.
SEBI has embraced the use of latest technology and data analytics to detect market misconduct, such as, insider trading, front running, price manipulation and financial statement frauds.
“Market infrastructure institutions such as stock exchanges, depositories and the clearing corporations, act as the first level regulators for issuers of securities as well as for intermediaries. These institutions are entrusted with the responsibility of providing equal, unrestricted, transparent and fair access to all market participants. In fact, they are the first line of defence to ensure investor protection and market integrity,” SEBI chairman said.
“In India, we have chosen a model that allows competition, public shareholding and profits for market infrastructure institutions which fosters efficiency in operations, encourages innovation, and provides natural back-ups,” Pandey added.
