SEBI says no evidence of illegal activity

In the midst of the stock market benchmark Sensex plunging by over 1,000 points before recovering partially, SEBI Chairman C B Bhave today said the regulator has not come across any illegal activity in the market and that it would take stringent actions, if needed.

"So far there is no evidence of any illegal activity in the market. If there is any illegal activity taking place, we will certainly take stringent actions," Bhave told a private TV channel.

"Wherever complaints have come to us, we have started probes and they are under investigation," he added.

Earlier in the day, Bhave told another TV channel that SEBI was keeping a close watch on the developments and there was no reason to be worried.

"I have confirmation from both of the stock exchanges that they have seen nothing unusual in the market today. We are keeping a close watch on this," Bhave told a private TV channel.

SEBI is also in close touch with the Reserve Bank of India and the finance ministry. Liquidity was the main issue, the RBI has addressed it, Bhave said.

Bhave said SEBI has communicated on liquidity concerns to the central bank. "The central bank is releasing liquidity in the market. To our mind, this will help. But, we are still keeping a watch on this," he said.

Replying to queries, the regulator said there are only finite number of measures that can be taken. "As you can see the global situation is not very different. There is a limit to what can be done," Bhave noted.

The SEBI Chairman added that there was little the market regulator could with regard to issues like liquidity.

"So, it is really the central bank and it is in action," Bhave said.

On queries whether redemption pressure was being faced by mutual funds, he said SEBI was collecting the data and the general liquidity issue was something that needs to be addressed and the RBI has done it.

Pointing out that there was no payment issues in the market today, Bhave said both the exchanges have confirmed that pay in and pay out has gone smoothly.

"We have not seen any event in the market with regard to the margins available from the brokers that should at anyway alarm us. We are keeping a close eye on this," he stated.

The regulator added, people would sell or buy the shares depending on their preferences and prices. "But that is not something as a regulator we can intervene in. We have to see that the integrity of our markets will be maintained."

On futures market, he said actions taken by various regulators show that the derivatives market were not touched, it was only in the cash market that some action was taken by them.

"There is no shorting by institutions in our cash market and so we do not see any worry there."