SEBI increases investment in data, technology for better transparency: Annual Report

 SEBI increases investment in data, technology for better transparency: Annual Report

Regulators equipped with several new algos to monitor, say chairperson

The Securities and Exchange Board of India (SEBI) is investing in data and technology, two new tools to increase transparency, ensure fairness and help investors make an informed choice, Chairman Madhabi Puri Buch said in the regulator's annual report. Said in the message 2021-22.

The market regulator will invest in automation of surveillance, investigation and oversight, she said.

“Many new algorithms have been developed by the market monitoring team and mutual fund oversight team. These initiatives will be carried forward and replicated in other domains of the market as well,” said Butch. He added that Sebi will rely more and more on the data. And will give up dogma in any form.

The chairperson in his recent addresses has advocated data democratization and also showed the path SEBI is taking to achieve this. In its message, it said, "We are working with market infrastructure institutions and market participants to deliver free, standardized, structured and machine-readable data related to every segment of the market."

He added that he would like to encourage the adoption of RegTech by all market participants going forward.

Focusing on the need for more depth in the bond market, Butch said there is a need for a strong corporate bond repo market to make the market commercially attractive and in turn bring in liquidity. During 2021-22, 784 corporates raised Rs 5.2 trillion through private placements in electronic bidding platforms.

Further, building on the existing ESG framework, including disclosures by listed companies and investments by ESG-themed mutual funds, ESG rating providers may be required to provide disclosures.

"Going forward, the third phase of the framework, which is disclosure by agencies that provide ESG rating services, is being discussed," Buch said. On the ESG front, he said the regulator is conscious that with the need to align with global benchmarks, there must be adaptations for several ESG aspects that may be unique to emerging markets like India.

In a discussion paper issued by the regulator, it had proposed that credit rating agencies and research analysts with a net worth of at least Rs 10 crore and standard infrastructure and manpower would be eligible to be recognized by SEBI.

At the end of the last financial year, there were eight ESG themed mutual fund schemes in India with assets under management of Rs 11,652 crore.

The annual report showed a growing interest in alternative investment funds (AIFs). In FY 2012, 153 new AIFs were registered against 90 AIFs in FY 2011, showing an increase of 92.8 per cent in funds raised.

SEBI said that during 2021-22, it has taken up 38 new cases and completed 82 cases related to fraud and unfair trade practices (FUTP) violations. On the other hand, under the arbitrator rules, 24 certificates of registration were cancelled, six were suspended and eight were issued warnings.