Sebi to increase surveillance, prevent insider trading

Capital markets regulator Sebi has embarked upon a massive programme to increase surveillance on listed companies and prevent insider trading, its chairman U.K. Sinha said today.

“Companies should also improve internal controls and come clean on financial reporting,” he said while addressing fourth managing committee meeting of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in Mumbai.

This is essential for healthy capital markets in the country, he added.

Mr. Sinha said capital markets are set to grow fast in coming years as the needs for infrastructure development are enormous. According to government estimates, investments worth one trillion dollars are required in the next ten years to expand and improve the country’s infrastructure.

Few countries in the world have positive growth prospects like India does.

There is a high degree of confidence among foreign investors in the integrity of Indian markets, said Mr Sinha.

He added that the Securities and Exchange Board of India (Sebi) has formed a group of experts to expand the market by reaching new retail investors, introducing new products and working out risk mitigating measures. The regulator is also trying to spread financial literacy by undertaking a major initiative for investor education and awareness.

On the proposed changes in Takeover Code, Mr Sinha said mergers and acquisitions are legitimate in a growing economy. Attempts will be made to provide norms with a modern and forward-looking approach.

He, however, admitted that the pace of pension reforms has been slow and this has restricted the growth of asset management companies.

Earlier, ASSOCHAM president Dilip Modi hoped the reforms in banking, insurance and pensions will be expedited in future. Small and medium enterprises should have easy access to capital markets, he said.

“Helping small and medium enterprises to corporatise will enable the economy to grow even faster,” said Mr Modi. Robust equity markets are needed to improve infrastructure in the country, he added.

Among others present during the meet were ASSOCHAM’s senior vice-president R.N. Dhoot, Vice-president Analjit Singh and secretary general D.S. Rawat.