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Scale up Sebi, says FM; curb insider trading, reiterates PM

Singh, Chidambaram were talking at an event to mark Sebi's silver jubilee

Sachin P Mampatta Mumbai
The Finance Minister asked the market regulator to increase the number of people it has policing the markets, while the Prime Minister encouraged it to root out insider trading; at an event to mark the Securities and Exchange Board of India’s silver jubilee.

The Finance Minister P Chidambaram asked Sebi to scale up its human resources suggesting that its current work force of 600 may be inadequate to deal with the country’s vast population and growing economy.

The Prime Minister Manmohan Singh too echoed the same citing the increasing number of entities that Sebi needs to regulate.

“It is only by building its human and technological capabilities that the Board can fulfill its mandate of delivering strong enforcement” he said.

 

“A key indicator of Sebi’s future effectiveness will be its ability to root out the hard-to-define but extremely pernicious disease of insider trading,” he added.

Sebi has in the last year, made several moves on insider trading.

It imposed a penalty of Rs 11 crore for insider trading on Reliance Petroinvestments, a subsidiary of Reliance Industries Ltd (RIL), earlier in May.

The regulator had investigated the company for buying shares of Indian Petrochemicals Corp Ltd (IPCL) just before it declared an interim dividend and announced a merger of IPCL with RIL.

Also, RIL has moved the Securities Appellate Tribunal after Sebi refused to settle another case of insider trading against it by payment of a monetary penalty.

Sebi has also set up a committee to look into insider trading regulations and strengthen the same. The next meeting of the committee is scheduled for June.

The Prime Minister also asked the regulator to speed up a proposal to make it easier for certain foreign investors such as pension funds, university funds, central banks and sovereign wealth funds to invest in India.

“This is an area which needs priority attention, especially in view of the current macro-economic environment in our country. I would urge the Board to quickly bring to fruition the initiatives that are already underway in this regard,” he said.

He also asked that efforts be made to improve the corporate debt market.

Others present at the event included Union Minister for Communication and IT, Kapil Sibal, Deputy Prime Minister of Singapore, who is also the Minister of Finance, T Shanmugaratnam; Governor of Maharashtra, K Sanakaranarayanan; Chief Minister Prithviraj Chavan; and Union Ministers Namo Narain Meena and Milind Deora.

UK Sinha Chairman of Sebi made a reference to the need to amend the Sebi regulation and give it more powers in his speech.

No mention was made on the same by the ministers present. They did however, release a postage on 25 years of Sebi.

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First Published: May 24 2013 | 7:21 PM IST

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