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The SEBI-constituted N.K. Sodhi Committee on insider trading is likely to submit its draft norms in the next six to 10 days according to SEBI Chairman U.K. Sinha.
Speaking on the sidelines of a CRISIL seminar on expanding India’s corporate bond market, he said, “They have almost finalised it and I am told that they will submit the report in a week’s time or maximum 10 days.”
Insider trading is the act of buying/selling a company’s shares by entities having access to unpublished price sensitive information (not in the public domain).
The 19-member committee headed by Justice (retd) N.K. Sodhi, former Presiding Officer of the Securities Appellate Tribunal was constituted on April 26, this year.
The committee has the mandate to review insider trading regulations and suggest amendments and recommendations.
SEBI is likely to discuss the panel’s recommendations in its board meeting expected to be held on December 23.
Integrating platforms
If the corporate bond market in the country has to become vibrant and liquid, then there is a serious need to integrate different platforms where trading takes place, Sinha said.
“There are situations when trading settlement happens on one stock exchange platform and reporting happens on another platform,” Sinha said. India’s corporate bond market accounts for only 14 per cent of the gross domestic product, compared with close to 60 per cent for advanced economies.
He added that in the corporate bond market, trading and settlement take place either over-the-counter or on a stock exchange platform or a Fixed Income Money Market and Derivatives Association platform.
He said that in case of commercial papers and certificates of deposit while settlement is taking place on stock exchanges, the reporting is happening elsewhere.
“We are working with different stakeholders on how we can get different instruments on a unified debt settlement platform, where we can give a big push to the secondary markets,” Sinha added.
He said that something on the lines of the government security market has to be developed for corporate bonds. All the government securities of varying coupon rates and tenors are traded and settled on the Clearing Corporation of India platform.
REIT
On real estate investment trusts, Sinha said SEBI had taken up the taxation issue with the Government.
“We have got a lot of feedback on REITs from market players. We are hoping to go to our board with REITs in the next meeting. But whatever we decide, REITs can take off only when there is clarity on the tax treatment. On REITs, both are required — SEBI’s regulation as well as tax clarity,” he said.
On MCX-SX appointing a CEO in the near future, Sinha said SEBI’s role was to vet the appointment of a CEO and not select the CEO.
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