Special unit to aid stricter regulatory enforcement

Sebi in the process of implementing Oliver Wyman recommendations

The capital markets regulator, Securities and Exchange Board of India (Sebi), in the process of revamping its enforcement wing, to be able to probe and proceed against violators in a more effective way.

The overhaul, to include establishing a specialised unit and strengthening the personnel, is based on recommendations made by Oliver Wyman, the international consultancy. It had been brought in in by the market watchdog in 2012 to assess its performance and to advise on organisational restructuring.

According to sources, Sebi has initiated the revamp action by creating a task force, entrusted with responsibility for implementing and shifting to a new system. Under the latter, all enforcement proceedings will be handled by the enforcement department alone, letting the others focus on their core activity.  

SEBI GETS TOUGH

• Sebi aims to improve effectiveness of enforcement
• All proceedings to be handled by enforcement department; others to provide leads and focus on their core activities
• Department to get more staff
• Turnaround time at every step to be improved
• Sebi will set up a new data management system

*SAT: Securities Appellate Tribunal

“The other departments will continue to provide leads; the enforcement department will take care of follow-up action such as issuing of notices, organising hearings, passing of orders and handling court proceedings,” said a Sebi source.

The regulator also aims to improve the enforcement timelines and clear a large pile of pending cases,  a source added. As on March 2013, a little over 1,000 proceedings, 114 enquiry proceedings and a little over 2,000 adjudication proceedings were pending, according to the annual report for the year.

Sebi has been dealing with enforcement action in quite a few high-profile cases, including those against Reliance Industries, the Sahara group and Bank of Rajasthan. It also initiated action against a slew of collective investment schemes, in diverse areas.

Under the new process, Sebi plans to have a fixed and significantly reduced turnaround time for every step of enforcement.

The regulator will also set up a robust data management system; the current system is said to lack accuracy. The new system will store information on all previous cases and proceedings, in a better way.