Sebi to upgrade surveillance system

Market watchdog the Securities and Exchange Board of India (Sebi) is planning a major upgradation of its key surveillance system through which it monitors data from stock exchange and depositories for identifying the manipulation activities.

The move would help the regulator in its efforts towards a better, continuous monitoring of manipulation attempts in the stock market and analysis of daily transaction data.

Sebi, which has been using the Integrated Market Surveillance System (IMSS) since December 2006 for market surveillance purposes and identifying the suspicious transactions, has now decided to further upgrade the IT infrastructure of the system.

The regulator is looking to add additional security and accessibility features to the system for a faster and more secure monitoring of the market.

A senior official said that the IMSS system is very useful in situations like the one being witnessed currently, when volatility is on a very high level and the attention is mostly focussed on the major market-moving developments.

The market manipulators tend to be more active in these situations, thinking that the oversight machinery would be mostly focussed on monitoring issues like risk-management systems and proper settlement of payment obligations.

However, the IMSS keeps working on an auto-pilot like basis and an upgraded system would further help in the surveillance activities of the regulator, official added.

Sebi is looking to upgrade the IMSS systems at its main data centre, as also at the three stock exchanges (BSE, NSE and MCX-SX) and the two deposities NSDL and CDSL.

The system collects transaction and master data from the stock exchanges and two depositories (NSDL, CDSL) on a daily basis to generate alerts for predefined market manipulation scenarios.

It also provides data analysis and benchmarking tools, which are used in various policy decisions of the Sebi.