Sebi sets up committee on fair market conduct

Market regulator Securities and Exchange Board of India (Sebi) has set up a committee on 'fair market conduct', which will suggest measures for improving surveillance of the markets and strengthen rules for algo trades, among other things.

The committee set up under the chairmanship of TK Viswanathan, ex-secretary general, Lok Sabha and ex law secretary, has representatives of law firms, mutual funds, retail brokers, institutional brokers, forensic auditing firms, foreign portfolio investors, stock exchanges, chambers of commerce, data analytics firms and Sebi as other members.

The committee has been tasked with the job of identifying opportunities for improvement in Sebi (Prohibition of Insider Trading) Regulations, 2015 and Sebi (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 2003, more particularly with respect to trading plans, handling of UPSI during takeovers and aligning Insider Trading Regulations  to Companies Act provisions.

''The committee will suggest short-term and medium-term measures for improved surveillance of the markets as well as issues of high frequency trades, harnessing of technology and analytics in surveillance,'' the Sebi said in a release.

Besides, the committee will suggest evidentiary issues in anti-fraud enforcement, Sebi stated.

While the securities market environment remains dynamic, Sebi said, an efficient surveillance mechanism is a prerequisite for early detection of market infractions leading to effective and preventative enforcement measures. Periodic review of regulations and surveillance mechanisms is of utmost importance in order to effectively discharge the objectives of Sebi, it added.

Meanwhile, Sebi also said it has provided options to the exclusively listed companies (ELCs) on its dissemination board to raise capital for meeting capital requirements for getting listed on the nationwide stock exchanges or to provide exit to investors.

Further, ELCs were required to furnish the plan of action by 9 January 2017 to the designated stock exchanges, which was subsequently extended till 30 June 2017.

The circular stipulated that directors, promoters and the companies which are promoted by any of such ELCs that remain non-compliant within the timelines shall not directly or indirectly associate with the securities market or seek listing for any equity shares for a period of ten years from the exit from the DB.