The Securities and Exchange Board of India will tighten disclosure requirement for entities and individuals in the business of recommending stocks to investors to curb insider trading, its chairman UK Sinha said on Friday.
“We have introduced research analyst regulations in a soft manner. Going forward we will make it stricter,” Sinha said speaking at The Indian Express Idea Exchange programme.
Acknowledging that any case similar to Rajat Gupta, the former McKinsey chief convicted of insider trading in the US, would have been difficult to catch in India, he said the regulator has been improving surveillance system to catch suspicious trading patterns. Sinha said the US authorities managed to nail Gupta as they got clinching evidence against him through wire tapping.
The Sebi does not have the power to tap phones. It can only request for call data records in suspicious cases. In India only a few economic agencies like the Central Board of Direct Taxes have the power to tap phones.
The Sebi chief made it clear that the market regulator through its Sebi (Research Analysts) Regulations, 2014 that took effect on December 1, has shown the intent to tighten disclosure requirements. Even the people giving opinion through media would be required to register under the Sebi regulations, he said.
Speaking on the slackness on the part of the government-owned entities in appointing at least one women director in their boards, Sinha said, “We have written to the cabinet secretary that requirement of listed PSUs must be met.”
On the merger of commodities regulator Forward Markets Commission with Sebi, he said the process would be completed by September. The merger was announced in the Budget in February and was reccomended by the Financial Sector Legislative Reforms Commission to streamline financial sector regulatory regime.