Category-wise FII data, price alerts mooted

The Securities and Exchange Board of India's (Sebi) Advisory Committee on Derivatives and Market Risk Management has suggested that information on foreign institutional investors and their sub-accounts be categorised into pension funds, insurance companies, mutual funds, and others, based on the information submitted by them during registration.

The proposals are part of a Sebi discussion note, put up on its website. Arguing for a change from the current system of disclosing FII information on an aggregate basis, the panel said, "FIIs and their sub-accounts are not a completely homogenous category in terms of their investment horizons, trading strategies or governance structures."

It said the aggregate trading of each category of investors in both the cash market and derivative markets may be disclosed, which would allow the market to distinguish between different types of FII flows on the basis of their likely time horizons and the informativeness of their trades.

In another significant proposal, the panel wants alerts in price movements or trading patterns""currently used by surveillance staff at stock exchanges for examination and investigation""to be made available to the public on a real-time basis.

According to the members, the current software can generate a stock watch alert that does not contain any sensitive trader level data. The alert might simply say that a certain pattern of trading was found and might also report the volumes and number of traders involved.

The response of the surveillance staff to the stock watch alert would continue to remain confidential. The discussion paper states that the above proposals were supported by most members of the Advisory Committee.

Other proposals by the committee included disclosing names of top 10 brokers/trading members, in terms of trading volumes in each security in the cash and derivative market, as well as in terms of proprietary trading volumes in each security/underlying.