Securities and Exchange Board of India is working on more disclosure by small and medium enterprises that are hitting the market to address issues of manipulation seen both at the IPO level and at the price level, Chairperson Madhabi Puri Buch said today.

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Pointing out that the size of the issue as well as the free float of the SMEs were small, Buch said, “it is relatively easy to manipulate both at the IPO level and at the trading level. I think as a first step we are clear that some more disclosures are needed in terms of the risk factors.” The regulator had received feedback that the relatively lenient oversight for SMEs was being misused by some of them, with result that many surveillance measures that were not applicable to the SME board are now in play for them too.

Buch spoke at an exclusive interaction with women journalists as part of International Women’s Day celebration.

The regulator had the technology to monitor price movements and subscription data and see evidence of manipulation and there were ‘certain patterns,’ she said. It would take time to ‘construct an entire case’ and act on it. The malpractices had been observed both at the time of IPO during subscriptions as well as at the listing stage.

“Fortunately, the market has given us feedback and advised us on, what we can do in order to identify such cases and to deal with them,” she added. With the industry’s cooperation it would be possible to mitigate some of the risks inherent in this area.

Several SME IPOs that have hit the market last year as well as recently have been oversubscribed hundreds of time while listing gains have been several times their issue price.

There was no timeline given by Buch for disclosures as it was still in the initial stages. Action would be taken on any constituent, depending on who is found culpable during the investigations.

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“We are still working with advisors to try and understand the dimensions, the data and analyse the data.”

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