New Delhi: The Economic Survey tabled in the Parliament has expressed concern over the subdued stock markets and has asked the Centre to strengthen the regulatory and surveillance mechanism to prevent market speculation.

“The most difficult area in terms of obtaining a sound secondary market, concerns the problem of market manipulation, and those of establishing sound procedures of surveillance,” the pre-Budget document, tabled in the Parliament, said.

The survey also asked the Centre to focus on the need for greater regulatory and market-based mechanisms for giving incentives to firms for better disclosure and at the same time to make the Permanent Account Number mandatory with every trade in the secondary market.

Hoping that recent legislative changes in the SEBI Act to enable the regulator enforce proper market conduct would help check market manipulation, the survey said: “The subdued conditions in domestic capital markets, however, conceal important structural reforms.”

The survey also highlighted the constraints for the Securities and Exchange Board of India in shortening the three-day delay between the transaction and settlement date due to poor payment infrastructure across the country, even as the market regulator expressed confidence on introducing T+1 system.