Lok Sabha Question No. 2457 (UNSTARRED), answered on 2018-03-09
Subject: Frauds Pertaining to Stock Market
Ministry: FINANCE
Asked by: NARANBHAI KACHHADIA, VIJAY KUMAR S.R., T. RADHAKRISHNAN, BIDYUT BARAN MAHATO, ANWHAR RAAJHAA, GAJANAN CHANDRAKANT KIRTIKAR, ASHOK SHANKARRAO CHAVAN, KUNWAR HARIBANSH SINGH, SUDHEER GUPTA

## Government  oflndia Ministry  of Finance Departnent  of Economic Affairs

## LOKSABHA I]NSTARRED  QUESTION NO. 2457 TO BE ANSWERED ON FRIDAY, MARCH 09,2ol8/PHALGUNA  18, 1939 (SAKA)

## FRAT]DS  PERTAINING  TO STOCK MARI(ET

## OUESTION

2457. SHRI NARAI{BHAI  KACHIIADTYA,  SHRI S.R. \IJAYAKUMAR, SI{RI T. RADHAKRISHNAII,  SHRI BIDYUT BARAN MAHATO, SHRI A. AI|IWHAR RAAJHAA, SHRI GAJA}{A]\I  KIRTIKAR,  SHRI ASIIOK SHAI\KARRAO  CHAVA]\[,  KI]NWAR HARIBA}ISH SINGH & SHRI SUDHEER  GUPTA:

Will the Minister of FINANCE  be pleased  to state:

(a)  the number  of frauds pertaining  to stock  ma*et,  illegal collective  investnent  schemes  and insider trading detected by the Securities  Exchange  Board of India (SEBI) during  each ofthe last three years and the current  year;

- (b) whether the SEBI has decided  to introduce  new shareholding rules and ease direcorship conditions for stock exchanges,  depositories  and clearing corporation,  if so, the details thereof along with the aims and objective  thereto;
- (c)  whether  the Govemment  has set up a five member panel to consider  these  proposals;
- (d)  if so, the details  thereof and the time by which  the panel  is likely to submit  its report to the Government;  and
- (e)  the steps taken/being  taken  by the SEBI to enhance  investor protection  and creating effective securities market?

## ANSWER

## MII\ISTER OF STATE IN TIIE MINISTRY  OF FINANCE

(SHRI  PON. RADHAKRISHNAN)

(a): The number of investigation  cases taken up by the securities market  regulator, Securities and Exchange  Board  of India  (SEBD,  for alleged violation  of securities laws during the last three  years and current  year is given below:

| Particulars                           | Investigations taken up   | Investigations taken up   | Investigations taken up   | Investigations taken up   |
|---------------------------------------|---------------------------|---------------------------|---------------------------|---------------------------|
|                                       | 2014-15                   | 2015-16                   | 2016-17                   | 2017-18#                  |
| Market manipulation and price rigging | 4t                        | 84                        | 185                       | 36                        |
| "Issue" related manipulation          | 3                         | 9                         | 8                         | 2                         |
| Insider Trading                       | l0                        | t2                        | 34                        | 9                         |
| Takeovers                             | J                         | 2                         | 3                         | 1                         |
| Collective Investrnent Schemes (crs)  | 65                        | 46                        | ll                        | 14                        |
| Miscellanqrus                         | t3                        | 26                        | 15                        | 54                        |
| Total                                 | 135                       | l'.I9                     | 256                       | ll6                       |

# data upto Dec, 2017; For CIS, data is upto 28 Feb 2018

(b). (c) and  (d):  A Committee has been constituted by SEBI under the Chairmanship  of Shli R. Gandhi,  (Former  Deputy Govemor, Reserve  Bank of India) to review  the Regulations  for Market Infiastructure  Institutions (MIIs) - slock exchanges, depositories  and clearing  corporation.  The other members of the Committee are: '{:..: i,

2. Shri. Leo Puri,  Managing Director,  UTI AMC Ltd
- l. Shri. G. Ananthararnan,  Former Whole Time Member,  SEBI
3. Prof. Gopal Nai( Professor,  IIM Bangalorc.
4. Shri Sujit Prasad  Executive Director, SEBI

The terms of reference  of the committee include overall assessment/adequacy  of existing  MIIs' framework  and identifring areas for review in the extant Regulations and relevant Circulars  dealing with ownership /shareholding  norms and govemance  norms; identifting  and recommending  on areas for continuous  improvement  of systems, procedures  and practices; addressing suggestions  / comments of public received  as part of the consultation  process; and, assessing  the possibility  of extending the extant framework of MIIs to new market intermediaries  which could be classified  as MIIs. The committee is expected to submit its interim  report by March 31, 2018.

Q)i  The systems  and practices are in place  to promote  a safe,  transparent  and efficient  market and to protect market integrity. The systems instituted  include  advanced  risk management mechanisms comprising  continuous  monitoring  and surveillance,  various limits on positions, margin requirements,  circuit  filters, etc. Further,  SEBI  maintains constant  vigil in the market, and in case of any abnormality,  takes appropriate action against the concemed entities. SEBI has also been conducting  regular  meetings  with officials of the stock  exchanges  and depositories  and they have been advised to step up their own surveillance  measures and to initiate expeditious  demonstrative action wherever waranted so as to protect  investors' interest and ensure  orderly functioning  of the stock  market. Further,  SEBI  has been continuously  undertaking  various awareness activities to reach out to investors  to promote education  / awareness among  investors. The inyestors are also cautioned against  Ponzi  schemes  in the awareness programs. Further, the grievances  lodged  by investors  are taken up by SEBI with the respective  entities and monitored on a regular basis.