Sebi plans stronger surveillance systems in 2013-14

Last Updated 25 March 2013, 09:19 IST

Market regulator Sebi plans to put in place a stronger and more effective surveillance system in the next fiscal 2013-14, by way of greater checks against money laundering and an overhaul of its regulations for various market entities and trade activities.

The measures proposed to be taken in the fiscal beginning next month include enhanced surveillance of derivatives market, first-stage monitoring by brokers, stronger audit mechanism for market entities and review of anti-money laundering and combating terror funding norms.

Besides, Sebi also plans to bring in guidelines to address conflict of interest for credit rating agencies, introduce regulatory framework for foreign intermediaries soliciting business from investors in India and put in place a centralised KYC framework for the entire financial sector.

The proposed steps are part of Sebi's budget proposals for the year 2013-14, which have been approved by its board and would be implemented during the course of the year.

One of the top priorities identified by Sebi for 2013-14 would be "protecting the integrity and safety of the market through a stronger and more effective surveillance mechanism and by strengthening the inspection process of intermediaries", a senior executive said.

Sebi is also planning to strengthen its manpower in the next fiscal, besides greater efforts towards training and skill building of existing staff members.

The regulator would also strengthen its Data Warehousing and Business Intelligence System (DWBIS), the project which has been initiated in phases to generate reports to identify, detect and investigate aberrations and market abuses that undermine market integrity.

In its budget proposals, Sebi also said that it is necessary for the intermediaries to maintain high levels of compliance with the stipulated norms.

In order to provide the services to the investors at their door step and to promote a balanced securities market, Sebi is also working on enhancing the physical proximity of Sebi offices to investors and intermediaries.

While ten new local offices are expected to be functional by the end of this month, six more local offices are proposed to be opened during the year 2013-14.

Enthused by a significant increase in receipt of grievances due to its mass media campaign in 2012-13, Sebi plans to further strengthen the campaign in next fiscal.
Sebi further said it would restart the process of putting in place an unified filing and dissemination platform, called Sebi Unified Platform for Electronic Reporting-Dissemination (SUPER-D), to make available information filed with Sebi in user friendly and analysable form to the investors and various stakeholders.

With a view to enhance the scope of its activities to more comprehensively monitor compliance with listing requirements, the project was proposed in 2011-12, but the tender process was discontinued in 2012-13. The project is now proposed to be completed in 2013-14.

Sebi further said it is necessary to carry out continuous review of policy by administering, supervising and inspecting Market Infrastructure Institutions (MIIs) to ensure proper functioning in accordance with laws so as to develop and maintain a risk free and fair market place.

The steps proposed in this regard include introduction of pre-open call auction and post-close call auction, policy on trade annulment to be framed, review of policy on block deal window, straight through processing for retail trades, steps for developing corporate bond market.

Other proposed measures are guidelines on utilisation of depository Investor Protection Fund and reporting of client collateral collection and utilisation to clearing corporations.

Sebi also plans to enhance its international cooperation with other regulators from across the world and would host a meeting of Asia Pacific Regional Committee of IOSCO and a Committee meeting of IOSCO during 2013-14. Sebi has estimated a net budget deficit of Rs 108.10 crore in 2013-14, down from Rs 275.51 crore in current fiscal.

The capital expenditures have been estimated for Rs 121.61 crore, total revenue expenditure at Rs 200.57 crore and total income at Rs 359.08 crore. In the revenue account, Sebi has estimated a surplus of Rs 158.5 crore in 2013-14, as against Rs 161.38 crore this fiscal.

Sebi estimates to spend about Rs 57 crore on acquisition of office premises next fiscal, down from Rs 281 crore in 2012-13, while Rs 65 crore has been proposed for acquisition of equipment, computers, furniture and fixtures, vehicles, etc.

Sebi has set up an 'Investor Protection and Education Fund' (IPEF) with an initial corpus of Rs 10 crore. The fund is being used for investor education activities of Sebi and the total amount lying in the Fund as on January 31, 2013 was Rs 54.88 crore out of which Rs 53.15 crore stands invested in earmarked Fixed Deposits with banks.

In view of the proposed expenditure of Rs 74.88 crore on various investor protection and education initiatives during the year 2013-14, a separate proposal for additional fund for IPEF could be placed before the Sebi Board.

(Published 25 March 2013, 09:19 IST)

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