Business Daily from THE HINDU group of publications
Monday, Oct 09, 2006
ePaper
Business Daily from THE HINDU group of publications Monday, Oct 09, 2006 ePaper |
|
|
|
|
|
|
|
|
Home Page
-
Stock Markets Markets - Regulatory Bodies & Rulings Industry & Economy - Economic Offences N.K. Kurup
SEBI's reasoning Dealing with sophisticated economic crimes requires skills in areas such as securities trading, banking and finance SEBI had to hire professionals on deputation to crack the recent IPO allotment scam
Mumbai , Oct. 8 Capital market regulator SEBI plans to create a separate outfit with independent professionals for stock market surveillance and investigation, to make these two key activities more effective. According to a SEBI official, the idea is to rope in independent professionals such as practising chartered accountants, lawyers and financial experts to do this job. Two separate departments of SEBI now handle market surveillance and investigation. However, they are short of specialised hands to police the bourses and undertake sophisticated inquiries, leading to delays in investigation and corrective action.
Separate entity
The plan, the official said, is to hive off these two departments into a separate entity, which would be part of SEBI but function independently. In many countries, market surveillance and investigations are carried out by independent entities. The surveillance department monitors trading in stock exchanges to detect abnormal movements in share prices. This is crucial to safeguard investors' interest as price rigging — jacking up or bringing down prices deliberately by a group of traders — is a common phenomenon in stock trading. Equally important is investigation into market irregularities, which include price rigging, market manipulations and violation of takeover regulations. Of the 165 cases taken up for investigation by SEBI in 2005-06, 137 were related to market manipulation and price rigging. Under the present pay structure, SEBI finds it difficult to hire experienced professionals on a permanent basis. The proposed separate entity would be in a position to hire professionals on assignment-basis, said a senior SEBI official.
Specialised skills
With economic crimes getting more sophisticated, dealing with such offences require skills in areas such as securities trading, banking and finance. For instance, SEBI had to hire professionals on deputation to crack the recent IPO allotment scam, he said. Currently, market surveillance is carried out at two levels; stock exchanges — the frontline regulators — do the day-to-day monitoring and SEBI acts on the basis of information received from exchanges. The integrated surveillance system of SEBI enabled it to unearth several irregularities such as trading in penny stocks, detection of fake shares and misuse of IPO allotment in retail category. It was the swift move by SEBI on the basis of preliminary information that led to unearthing the multiple benami demat accounts that were sued to corner IPO shares.
Related Stories: More Stories on : Stock Markets | Regulatory Bodies & Rulings | Economic Offences | Restructuring
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
