Skip to main content

Vendors highlight chinks in Sebi’s surveillance system

By
Technology vendors met with market regulator Securities and Exchange Board of India (Sebi) recently to highlight the chinks in the regulator’s surveillance system.
“Vendors have suggested that surveillance at Sebi be made more real time instead of the T+ 1 mechanism that exists today. At present, the regulator checks on the trades that have happened and not the order book, which could give a better clue on any possible manipulation,” said a person familiar with the matter, on condition of anonymity.
At present, there is no way to detect if an entity is manipulating the share prices without actually carrying out any trades, added the person. “ It’s like an auction where an entity can drive up prices, forcing others to bid at higher prices,” he said.
This is a problem worldwide including developed markets such as the US and the UK, which also track data on T+ 1 basis, say experts. The US SEC has recently invested in a new technology called MIDAS to better track real- time data.
The aim of MIDAS is to analyse information on orders placed below the best bid or above the best offer, and not just data on the price and size of the best bid and best offer for each stock on each exchange. Every day MIDAS collects about 1 billion records from the proprietary feeds of each of the 13 national equity exchanges time- stamped to the microsecond. MIDAS analyses thousands of stocks over periods of six months or even a year, involving 100 billion records at a time.
Sebi is currently undertaking acomprehensive review of its surveillance systems with help from independent experts. The aim is to check manipulators, including black money launderers.
Sebi has been asked by a Special Investigation Team ( SIT) on Black Money appointed by the Supreme Court to take measures to catch those laundering black money through trading in PNotes and illiquid stocks.
An email sent to Sebi regarding plans to beef up its surveillance system went answered.
Sebi is also reportedly planning to expand the capacity of its Data Warehousing and Business Intelligence System ( DWIBS), used to identify possible violations like insider trading, front running and share price manipulation.
DWIBS went live in December 2011 and has helped Sebi crack a number of fraudulent activities. The system collects transaction and master data from exchanges and depositories daily. The market regulator is particularly concerned about manipulation done through algorithmic trading and plans to impose curbs on the same.
Business Standard, New Delhi, 30th Oct. 2015

Comments

Post a Comment

Popular posts from this blog

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

By
  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...
Post a Comment
Read more

Luxury carmakers urge clarity on GST rates to boost festive season sales

By
  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...
Post a Comment
Read more

Sebi proposes tighter norms for green bond third-party reviewers

By
  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...
Post a Comment
Read more