The Hindu Business Line : SMILE: SEBI's health check for markets

THE Securities and Exchange Board of India (SEBI) has set up a high level task force to carry out a thorough "health check" on the securities markets infrastructure. The move follows the recent imbroglio in ONGC share allotment.

Dr. P. J. Nayak, Chairman and Managing director, UTI Bank, would head the 12-member task force, according to a SEBI announcement.

The task force has been named Securities Markets Infrastructure Leveraging Expert Task Force (SMILE). The heath check will be conducted across all segments of the capital markets - equities, debt, derivatives, fund products - and will cover all market participants including stock exchanges, trading platforms, clearing and settlement systems, payment systems, depositories, issue houses and other intermediaries.

Speaking to Business Line, Mr G.N. Bajpai, Chairman, SEBI said the health check would focus on both the hardware and the skill sets of participants. ``This would be completed in less than six months,'' he said.

The task force will review the present infrastructure, diagnose deficiencies and adequacies and recommend solutions to upgrade infrastructure, standards of processes and skills. The recommendations consider the anticipated rise in the volumes in securities market transactions, multiplicity of products and growing number of participants within India and from outside.

The taskforce will also recommend best practices in setting up, maintaining and upgrading securities markets infrastructure. This will include business continuity plans in case of down times.

The hardware recommendations will include solutions for scalability of infrastructure and human resources' skill sets to diversify into products like commodities and foreign exchange, stated the SEBI circular.

The role and obligation of the market participants will be defined and demarcated and the task force will finalise solutions for seamless and secure technological interface between participants.

The members of the task force include Mr C.B. Bhave, MD, National Securities Depository Ltd; Mr Nachiket Mor, ED, ICICI Bank; Mr Ravi Narain, MD & CEO, NSE; Mr Manoj Vaish, ED & CEO, BSE; Mr Sanjay Nayar, CEO, Citibank and Mr Alok Vajpeyi, President, DSP Merrill Lynch Mutual Fund.

Mr Pratip Kar, Executive Director, SEBI will be the member Secretary of the task force.

The committee will also try and integrate the MAPIN database into the intermediaries' systems, so that there will not be any need to duplicate data entry processes. This would also help in shortening the application forms for initial public offers, according to Mr Bajpai.

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SMILE: SEBI's health check for markets