Sebi working on beefing up analytics arm; move to help improve surveillance

The Securities and Exchange Board of India (Sebi) is working on improving its analytical capabilities.

The move is to aid surveillance and other functions, according to Chairman Ajay Tyagi.

“A process by Sebi is also underway to further strengthen its in-house analytics capacity to support its market surveillance and risk management functions,” he said, while speaking at the 55th Annual Conference of the Indian Econometric Society, an event organised by the National Institute of Securities Markets (NISM) and Mumbai University.

The markets regulator also announced the setting up of a research advisory committee on Tuesday.  The committee will comprise both market practitioners and economists, according to a statement on Sebi’s website.

The committee will look to define “objectives, scope, and direction of research relevant for development and regulation of capital markets in India and for Sebi, especially keeping in view the linkage of research to policy making”, the statement said.

It added that it will also develop databases, explore research collaborations and promotion of research proposals by internal and external researchers.

Former Sebi chairman U K Sinha had previously remarked on the lack of sufficient research in Indian markets. He had said there is data that Sebi can provide for researchers who wish to conduct meaningful research on capital markets.

Tyagi on Tuesday said the thrust on research is to ensure that policymaking is based on ensuring that decisions are driven by facts and less by opinions of policymakers.

“Policymakers often have preconceived biases towards the outcome of their policy prescriptions. A policy backed by an independent research could go a long way in mitigating such biases, thereby leading to optimal decision making,” he said, according to a copy of the speech on the Sebi website.

Research can also monitor policy decisions and their effects after they have been implemented. 

It can also help make price discovery efficient. This can be through its aid in helping evolve a robust market, and identifying regulatory gaps compared to what is done elsewhere in the world.

He added that there is a research internship programme that the regulator has also put in place.

There was also a mention of recent events on capital markets. The year ahead will likely see some volatility on account of global issues, according to Tyagi. The effect of some of these has already been seen in the current financial year.

“Capital markets globally have been quite volatile during the current financial year and are likely to remain so in the coming days, on account of various factors such as US Fed rate hikes, volatile oil prices, intensifying trade conflicts and sanctions. The Indian markets have also been affected by these factors,” he said.

New initiatives

• Improving analytical capabilities 

• Move to help surveillance, risk management

• A research committee has also been announced

• Will aid in policy-making

• Research internships is also in place