A fair and efficient securities market stands on investor confidence. The same can be instilled by keeping the market free from manipulative practices. Regulatory intervention in this regard has been made in the areas of market manipulation and insider trading in the form of Regulations such as SEBI( Prohibition of Insider Trading) Regulations, 1992 replaced by SEBI (Prohibition of Insider Trading) Regulations, 2015. Similarly in order to curb the practice of market manipulation, SEBI has framed SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulations, 2003. An efficacious surveillance mechanism is a prerequisite for early detection of market infractions leading to effective and preventative enforcement measures.
It is noted that the securities market environment being dynamic, periodic review of Regulations and surveillance mechanisms is of utmost importance in order to effectively discharge the objectives of SEBI.
In this regard, SEBI has setup a committee under the chairmanship of Shri T.K. Viswanathan, Ex-Secretary General, Lok Sabha and Ex Law Secretary. The other members of the committee are the 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.
Terms of Reference of the committee includes identification of 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 align 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 committee will also suggest evidentiary issues in antifraud enforcement.
The committee is expected to submit the report within a period of four months.