New Delhi, June 27: The Securities and Exchange Board of India (SEBI) will come out with guidelines to deal with insider trading next month, its chairman D R Mehta has said.The rules, aimed at curbing insider trading in the stock exchanges, will be taken up by the SEBI Board at its next meeting in July, Mehta said at the 53rd founders day of Delhi Stock Exchange (DSE) here yesterday evening.Stating that there were already some regulations in place to deal with insider trading, Mehta said the new guidelines would demand self-regulation by market intermediaries. The new guidelines aim to check insider trading through a self regulatory mechanism on brokers, merchant banks and other market intermediaries.He also asked stock exchanges in the country to take stern action against companies involved in insider trading. Mehta said curbing insider trading was imperative to improve investor confidence in the market. "We want the stock exchanges to be self-regulatory bodies and impart them more powers. if we are unsatisfied with their functioning, SEBI will come down heavily on them," he said.Stating that many brokers were not separating their accounts from the clients' accounts despite SEBI's directive, Mehta asked stock exchanges to deal with them sternly.He pointed out that SEBI came up with a uniform guidelines for tackling bad deliveries of share certificates after observing that different rules prevalent in different bourses were resulting in confusion.Mehta said SEBI will also come up with guidelines allowing brokers to handle primary issues along with merchant bankers and bankers. The involvement of brokers would increase the number of outlets and reduce the cost of marketing the issues, he said.Mehta also said that after 2-3 months of internet trading, SEBI would define a new set of guideline on margins. "The SEBI group dealing with margins would meet again to decide on fresh margins soon," he said.Even after stringent regulations, New York Stock Exchange was closed for quite a number of times, while there was no such event in India because of high margins, Mehta said. During volatile days, margins collected at major bourses amounted to Rs 6,000 crore. The daily margin in normal period was about Rs 2,000 crore, which is 50 per cent of the total business in the markets, he said.Speaking on market volatility, he said the US market was one of the most volatile one but people were not bothered as it was best regulated. "We (in India) believe in rational and not volatile market," he added.There are about three crore investors in India as compared to five crore in the US and this figure is going to increase further, he said citing a study by SEBI and NCAER.As part of educating investors, SEBI will hold open house discussions in association with stock exchanges starting in Delhi from July first week. Mehta said open houses would be held in eight cities -four metros, Bangalore, Hyderabad, Kanpur and Jaipur.
