The Securities and Exchange Board of India (Sebi) has constituted a committee on ‘fair market conduct’, which will be headed by former Lok Sabha secretary and law secretary T K Viswanathan. The panel will have representations from Sebi, mutual funds, brokers, audit firms, stock exchanges, data analytics firms and legal firms.
The committee has been tasked with suggesting improvements to the existing Sebi norms, including on insider trading and fraudulent and unfair trade practices (FUTP). It has been specifically asked to look at trading plans, handling of price-sensitive information during takeovers and aligning of insider-trading rules with provisions of the Companies Act.
Legal experts said as new means of communications emerge, Sebi has to stay ahead to prevent fraudulent activity. Ensuring fair access and regulating the flow of price-sensitive information to prevent insider trading is one of the core areas for the markets regulator.
“A fair and efficient securities market stands on investor confidence. The same can be instilled by keeping the market free from manipulative practices,” Sebi said.
The committee has also been tasked with suggesting short-term and medium-term measures for improved surveillance of the markets, as well as issues of high-frequency trades and harnessing of technology and analytics in surveillance. The committee has been given four months to submit its report.
Last month, Sebi had set up another high-profile committee under the chairmanship of Uday Kotak, managing director, Kotak Mahindra Bank, to suggest measures for improving standards of corporate governance of listed companies.
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