Data via depositories' apps to help curb fraud, says Sebi chief Buch

New features to enable voting on resolutions, inheritance tracking

Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch on Thursday said that data directly sourced from depositories will empower investors to identify and prevent fraudulent practices by intermediaries. 

 

The Sebi chief made these remarks during the launch of unified apps -- SPEED-e by the National Securities Depository (NSDL) and MyEasi by the Central Depository Services (CDSL).

 

These apps aim to provide investors with a consolidated view of their demat securities, holding statements, and portfolio management. Additionally, they will enable users to monitor open positions and margin details across various exchanges and brokers. 

 

Buch cautioned against fraudulent players who claim to invest on behalf of investors but instead siphon off funds. She emphasised that the new unified apps will help investors verify the authenticity of such claims. 

 

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“As a regulator, we often encounter cases where investors are conned by market frauds who claim to have invested their money. In reality, these funds are siphoned off for years, leaving investors under the false impression that they hold portfolios worth lakhs or crores, when not a single penny has been invested in their name,” said Buch. 

 

The Sebi chief highlighted that the apps will also simplify inheritance tracking by consolidating all investment information, making the transmission of assets easy and traceable. Furthermore, investors will gain better control over portfolio allocation and investment decisions through direct access to data. 

 

“We believe this will be a powerful tool for investors, as they will receive information directly from the source of truth,” Buch added. 

 

The market regulator also plans to leverage these apps to enhance investor participation in voting on resolutions of listed companies. Currently, voting by minority and retail investors remains low. 

 

“Another feature of these apps is the ability to vote on various resolutions. In the future, proxy advisory services will also be integrated, democratising the process of passing resolutions in corporate operations,” said Kamlesh Varshney, Whole-Time Member of Sebi. 

 

Varshney further explained that investors will be able to track information submitted to the Central Board of Direct Taxes (CBDT) for taxation purposes on a quarterly basis. In case of discrepancies, investors can request depositories to file revised statements.