Sebi plans stronger surveillance systems in 2013-14

Proposed steps are part of Sebi's budget proposals for 2013-14, which have been approved by its board and would be implemented during the course of the year

The Securities and Exchange Board of India (Sebi), plans to put in place a stronger and more effective surveillance system in the next financial year 2013-14, by way of greater checks against money laundering and an overhaul of its regulations for various market entities and trade activities.

The measures proposed to be taken include enhanced surveillance of derivatives market, first-stage monitoring by brokers, stronger audit mechanism for market entities and review of anti-money laundering and terror combating funding norms.

Besides, Sebi also plans to bring in guidelines to address conflict of interest for credit rating agencies, introduce regulatory framework for foreign intermediaries soliciting business from investors in India and put in place a centralised KYC framework for the entire financial sector.

The proposed steps are part of Sebi's budget proposals for the year 2013-14, which have been approved by its board and would be implemented during the course of the year.

One of the top priorities identified by Sebi for 2013-14 would be "protecting the integrity and safety of the market through a stronger and more effective surveillance mechanism and by strengthening the inspection process of intermediaries", a senior executive said.

Sebi is also planning to strengthen its manpower in the next financial year, besides making greater efforts towards training and skill building of existing staff members.

The regulator would also strengthen its data warehousing and business intelligence system (DWBIS), the project which has been initiated in phases to generate reports to identify, detect and investigate aberrations and market abuses that undermine market integrity.

In its budget proposals, Sebi also said it was necessary for the intermediaries to maintain high levels of compliance with the stipulated norms.

To provide the services to the investors at their door step and to promote a balanced securities market, Sebi is also working on enhancing the physical proximity of Sebi offices to investors and intermediaries.

While 10 new local offices are expected to be functional by the end of this month, six more are proposed to be opened during 2013-14.

Enthused by a significant increase in receipt of grievances due to its mass media campaign in 2012-13, Sebi plans to further strengthen the campaign in the next financial year.

Sebi also said it would restart the process of putting in place a unified filing and dissemination platform, called Sebi Unified Platform for Electronic Reporting-Dissemination (SUPER-D), to make available information filed with it in user-friendly and analysable form for investors and various stakeholders.

To enhance the scope of its activities to more comprehensively monitor compliance with listing requirements, the project was proposed in 2011-12, but the tender process was discontinued in 2012-13.

The project is now proposed to be completed in 2013-14. Sebi said it was necessary to carry out continuous review of policy by administering, supervising and inspecting market infrastructure institutions to ensure proper functioning in accordance with laws so as to develop and maintain a risk-free and fair market place.

The steps proposed in this regard include introduction of pre-open call auction and post-close call auction, policy on trade annulment, review of policy on block deal window, straight through processing for retail trades and steps to develop corporate bond market.

Other proposed measures include norms on utilisation of depository investor protection fund and reporting of client collateral collection and utilisation to clearing corporations.