Chasing 'moving targets', Sebi to upgrade surveillance systems

Mumbai: Markets regulator Sebi plans to conduct a comprehensive review of its surveillance systems and further bolster its capabilities to keep manipulators at bay while its enforcement process is being further streamlined to effectively utilise the additional powers given to it.

"We are often chasing 'moving targets' requiring us to constantly realign our priorities and strategies to meet the changing systemic needs," Sebi Chairman U K Sinha said.

"... Sebi is all geared up to face newer challenges, evolve with the times and also to ensure the Indian capital markets scale greater heights in years to come," he said.

Articulating his views through the Chairman's Statement in the regulator's latest annual report, Sinha further said Sebi plans to strengthen the risk-based supervision framework for all intermediaries, in line with international standards.

Sinha said 2014-15 was "unprecedented in terms of the enforcement actions taken by Sebi against numerous unregulated collective investment schemes sprouting across the length and breadth of the country and duping numerous investors".

"Severe deterrent actions and penalties have been imposed on erring individuals and entities through enforcement actions throughout the year," he said, adding that the Indian securities market is on Friday being hailed as one of the best regulated ones in the world.

"This indeed is a matter of great pride for us. But, at the same time, this also brings in a huge responsibility on our shoulders to continuously strive to improve the Indian markets as also the quality of our regulations. Accordingly, the goals for 2015-16 have also been well laid out for us."

As per the Annual Report, Sebi's surveillance mechanisms have been effectively monitoring the markets and aberrations have been investigated to ensure a free and fair market.

While the present Sebi surveillance capabilities are equipped for generating alerts to facilitate detection of market manipulations, the dynamic nature of securities markets calls for upgradation of surveillance systems with enhanced skill sets.

"To this end, Sebi aims to conduct a comprehensive review of its surveillance systems by engaging external expertise in order to make the systems more transparent and competitive," the regulator said. Sebi further said a number of steps have been taken and will be further taken to make the markets "safe, fast, efficient, simple and clear".

In order to align with international standards, Sebi has revamped its insider trading regulations and notified rules on settlement of administrative and civil proceedings, Sebi said while listing out various regulatory actions, especially those pertaining to ponzi and collective investment schemes to make Indian securities markets more secure and regulated.