In order to safeguard the interest of small investors and overall market place, the Securities and Exchange Board of India (SEBI) has decided to put in place a greater oversight mechanism on insider trading and a stronger risk management framework as among key focus areas for 2014.
SEBI will soon issue a new set of insider trading norms, which would replace nearly two-decade old norms currently in operation. Further, new guidelines for insider trading are likely to put in place stricter penalties for those found to be indulging in insider trading activities. New norms would bring new categories of persons, including public servants, regulatory officials, and judiciary and government officials dealing with unpublished price-sensitive information under the purview of insider trading. Further, new insider trading norms clearly demarcate mistakes from serious violations committed by top corporate executives and other connected entities while trading in shares of listed companies.
The market regulator is also working on a number of initiatives such as risk management framework, trade annulment policy, interoperability of clearing corporations, policy on stress testing and a securities guarantee fund without including margin money. Furthermore, in order to attract more capital inflows into the Indian capital market, SEBI has sought for clarity on taxation policy to be applied to retirement- focused funds and also taking measures to attract foreign investors. SEBI prescribed adoption of risk-based Know Your Client (KYC) norms for foreign investors by categorising them into three segments.
SEBI will soon issue a new set of insider trading norms, which would replace nearly two-decade old norms currently in operation. Further, new guidelines for insider trading are likely to put in place stricter penalties for those found to be indulging in insider trading activities. New norms would bring new categories of persons, including public servants, regulatory officials, and judiciary and government officials dealing with unpublished price-sensitive information under the purview of insider trading. Further, new insider trading norms clearly demarcate mistakes from serious violations committed by top corporate executives and other connected entities while trading in shares of listed companies.
The market regulator is also working on a number of initiatives such as risk management framework, trade annulment policy, interoperability of clearing corporations, policy on stress testing and a securities guarantee fund without including margin money. Furthermore, in order to attract more capital inflows into the Indian capital market, SEBI has sought for clarity on taxation policy to be applied to retirement- focused funds and also taking measures to attract foreign investors. SEBI prescribed adoption of risk-based Know Your Client (KYC) norms for foreign investors by categorising them into three segments.
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