Securities and Exchange Board of India SEBI

Putting to use alerts generated by its robust surveillance mechanism, regulator Sebi has debarred nearly 1,350 entities from the markets for misusing exchange platform to evade taxes and other manipulations.

Besides, stock exchanges have also suspended trading in nearly 200 shares of listed companies while trade has been restricted in more than 150 other stocks as part of their own surveillance measures.

The coordinated efforts of Securities and Exchange Board of India (Sebi) and stock exchanges have resulted in an effective surveillance of the securities market, a senior official said.

“The regulator’s efforts to maintain the market integrity and to protect interests of investors have also resulted in greater confidence and trust of investors in Indian market.

This will go a long way in bringing even more participation of investors, especially retail investors,” he added.

Sebi and stock exchanges constantly monitor and take surveillance actions based on the alerts generated by a robust ‘alert generation system’ and on the basis of other inputs received from various sources including investigative agencies and government departments.

“The regulator is in constant touch with stock exchanges and in full coordination they have carried out various actions such as debarment of entities, suspension of scrips, halting payout of funds, reduction in circuit filters, etc, as part of their surveillance measures to protect the integrity of the market,” the official added.

Sebi’s Integrated Surveillance Department (ISD) receives information from number of sources such as media scanning, IB reports, SCORES (Sebi’s online complaint redresssal system), Suspicious Transaction Report (STRs) and exchanges.

This is in addition to Sebi’s IMSS (Integrated Market Surveillance System) and DWBIS (Data Warehousing and Business Intelligence System) systems, which form the core of alert generation process. More than 100 alerts are generated on an average every day, which are processed further and acted upon.

The information from various sources is aggregated across exchanges and analysed by dynamic system based parameters and pattern recognising modules which throw up alerts for first level processing.

These first level alerts are further screened by a central processing team which filters out alerts for second level scrutiny. The scrips shortlisted after scrutiny are further comprehensively analysed by Stock Exchanges and ISD for ascertaining any prima facie violations warranting immediate action.

The official said Sebi has taken action in several cases in the recent past involving different kind of modus operandi such as misuse of stock exchange platform for bogus LTCG (Long Term Capital Gains), misuse of illiquid options, issue of duplicate/bogus shares, misuse of commodities exchange platform etc.

“Altogether, Sebi has debarred nearly 1,350 entities from the market in last two years. In addition, as a surveillance measure, stock exchanges have suspended trading in nearly 200 securities of listed companies and moved over 150 scrips to lower price bands during the last two years,” he added.


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