Sebi calls for bigger, cleaner, safer market infrastructure

It said call on the recommendations by fair market conduct committee to further strengthen the rules to deter financial crimes like frauds, market manipulations and insider trading, will be taken soon. 

“We are also equally committed to ensure clean and safe markets. We are duty bound to ensure that the market mechanism is not misused or manipulated by the unscrupulous elements,” Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi said at the ‘Ficci CAPAM 2018’ conference. “The fair market conduct committee constituted by Sebi has since submitted its recommendations, which were also put in public domain seeking comments. A view on these recommendations will be taken soon,” he added. 

He said the manipulators will not be allowed to take advantage of the volatility in the stock market, which has plunged by around 900 points in the last two days on a combination of global and domestic factors impacting investor sentiment.

“The domestic markets are volatile, but they are globally volatile too. Our risk management economics are in place and manipulators will not be allowed to take advantage,” Tyagi said, adding that the regulator is vigilant. 

He warned that increase in oil prices, tighter global financial conditions, spillover risks from a global trade conflict and rising regional geopolitical tensions are some of the potential economic risks for the country, despite a positive economic growth outlook. Tyagi said objectives of improving ease of doing business and maintaining market integrity have to be properly balanced.

“While it may not be always possible to accurately quantify the costs and benefits of making a regulation, it will be our endeavour to keep on improving the processes going forward,” he said.

The Sebi chairman said that the continued investor confidence is a crucial factor in attracting more investors to the securities market and right governance framework and a transparent and clean market go a long way in meeting these expectations of investors at large.

Unlisted public companies have to compulsorily issue new shares in demat form beginning October 2, the Centre said, amid continuing efforts to curb illicit fund flows. Besides, transfer of shares by these companies has to be done only in the demat or electronic form. This step has been taken for “enhancing transparency, investor protection and governance in the corporate sector,” the Corporate Affairs Ministry said. The decision comes at a time when the ministry is clamping down on shell companies suspected of being conduits for illicit fund flows. From October 2, issue of further shares and transfer of all shares by unlisted public companies shall be in de-materialised form only, the ministry said. Under the Companies Act, 2013, there are public as well as private companies. Generally, those having more than 200 members are classified as public companies and they have to follow stricter corporate governance norms.