SEBI Forms Committee On Fair Market Conduct

by Vinaya HS on September 23, 2017

in Finance

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A panel has been formed by the Securities and Exchange Board of India (Sebi). This committee is constituted on ‘fair market conduct’. The panel will be led by Mr. T K Viswanathan, who is the former Lok Sabha secretary general and the law secretary. Also, the panel will have several representatives from the Sebi, mutual funds, retail and institutional brokers, audit firms, law firms, chambers of commerce, stock exchanges, data analytics firms, and other legal firms too.

This committee by the market regulator Sebi, will recommend the measures on how to improve the surveillance of the markets and also on the strengthening of the rules for algo trades along with various other norms.

The panel will work towards recommending the improvements to the current Sebi rules and norms. The norms that includes prohibition of insider trading (PIT) and fraudulent and unfair trade practices (FUTP) will be addressed. The primary function of the panel has also been set to look at the trading plans, handling the unpublished price sensitive information during takeovers. The job of the committee also includes the aligning of insider-trading rules with provisions of the Companies Act. Along with this, the panel will also suggest evidentiary issues in anti-fraud enforcement, the share market news confirms.

As per the latest legal news, it is utmost important for the board to stay far ahead in order to avoid any fraudulent activity, as many new forms of communications have started occurring. The matter of prime importance for the Sebi is currently to make sure that there is a fair access and the flow of price sensitive information to avoid insider trading which is regulated and monitored. Sebi notes that the securities market environment must be dynamic and the periodic review of the regulations and surveillance mechanisms is need of the hour to efficiently execute the goal of the market regulator. The market regulator believes in a fair and efficient securities market which is key for the investor confidence. Sebi intends to keep the market free from all the fraudulent and manipulative practices by inculcating the practice of fair market conduct.

Further to detail more on the KRA of the newly formed committee, the panel is given the job of making the recommendations for the short term and the medium term measures to improve the surveillance of the markets. Also, the task of suggesting in the issues of high-frequency trades and harnessing of technology and analytics in surveillance is also assigned to the committee. The committee has been given a time line of four months to make the submission of their final report.

Sebi had also set up a committee in the last month with an aim of suggesting the measures on how to improve the standards of corporate governance of the listed companies. This high profile committee was formed under the leadership of the Managing Director of Kotak Mahindra Bank, Uday Kotak, who is the chairman of this committee.

For more on Business & Stock Market News, visit BloombergQuint.




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