Hyderabad: Sebi chairman U.K. Sinha said on Tuesday the market regulator is setting up a committee to examine insider trading regulations.
“We have regulation for prevention of insider trading. We have now decided to set up a new committee to relook at entire regulations. So, the entire insider trading regulations will be revisited,” Sinha said.
“Like we had revisited the takeover code, similarly the insider trading regulations will also be revisited,” he said after the opening of new local office for Sebi in Hyderabad.
The committee will observe the practices that are followed in the other parts of the world and come out with its recommendations on insider trading by next year, he said.
Sinha said the regulator does not need any additional powers currently but if the committee recommends, the regulator may seek an amendment in the Act.
“We are not looking at more powers from the government. However, if the committee recommends that there is certain lacuna in the Sebi Act, then we will take up with the government. Right now, I cannot say whether I need new amendment from the Parliament,” Sinha said.
Asked about the recent trend of price erosion below the initial public offer (IPO) price after listing of companies, Sebi chief said the proposed guidelines on the safety margins for small inventors in the IPO will be finalised shortly. Sebi last year floated discussion paper on the subject and has received comments, he said.
“In the next one month or so, we would like to close this and take final call on this. We want small investor who is investing in the primary markets is protected,” Sinha said.
According to him, shares of one third of the companies which have gone for IPO in the past two years are now being traded below the offer price.
Sebi has opened its local office in the city as part of its efforts to reach out to investors across the country. As part of its decentralization of work to regional offices, the Mumbai-headquartered Sebi is opening new local offices in different regions of the country.
Sebi is looking to strengthen its regional offices since physical proximity of the regulator’s office to investors and intermediaries will promote deepening and broadening of the securities market.
Besides its headquarters in the country’s financial hub, the regulator has local offices in Indore, Bengaluru, Guwahati, Bhubaneshwar and Jaipur. The regulator has regional offices in Chennai, Delhi, Kolkata and Ahmedabad.