Lok Sabha Question No. 50 (UNSTARRED), answered on 2017-12-15
Subject: Fair Market Conduct
Ministry: FINANCE
Asked by: KAVITHA KALVAKUNTLA

## GOVERNMENT  OF INDIA MINISTRY OF FINANCE DEPARTMENT  OF ECONOMIC  AI'FAIRS FINANCIAL  MARKETS DIVISION

## LOKSABHA UNSTARRED QUESTION  NO. 50 TO BE ANSWERED.ON FRIDAY, 15th DECEMBER,20l7l  AGRAHAYAI\A  24, 1939 (Saka)

## FAIR MARKET CO-\DUCT

## OUESTION

## 50. SHzuN{ATI KA\,'ITHA KALVAKUNTLA:

Will the Minister of FINANCE be pleased  to state

- (a) whether the Securities and Exchange Board  of India has constituted Committees  on Fair Market Conduct and Financial  and Regulatory technologies:
- (b) if so, the details  thereof and their terms  of reference;
- (c) whether the Government plans to adopt  a regulatory  framework for Fin Tech business in India; and
- (d) if so, the details  thereofl

## ANSWER

## MINISTER  OF STATE IN THE ]VtrNISTRY OF FINANCE (sHRr PON RADHAKRTSHNAN)

(a) and (b): Yes ,  Madam.  The Securities  and Exchange  Board of India (SEBI)  has informed that it has set up a Committee  on Fair Market Conduct consisting of 15 members, rurder the chairmanship  of Dr. T.K. Viswanathan,  with the following  terms  of reference:

- Identification  of opportunities for improvement in SEBI (Prohibition  of Insider  Trading) R.egulations,  2015 and SEBI (Prohibition of Fraudulent and Unfair Trade  Practices  relating to Securities  Market)  Regulations, 2003, particularly  u.ith respect to trading  plans, handling  of unpublished  price sensitive information during  takeovers and aligning  Insider Trading  Regulations with the provisions  ofthe Companies Act,2013.
- t1 To suggest  short term and medirun terrn measrues for improved  surveillance  of the markets as well as issues of High Frequency  Trades, hamessing  oftechnology  and anaiytics  in surveillance.

SEBI has also hformed that it has constituted  a Committee on Financial  and Regulatory Technologies  (CFRT) consisting of 10 members  under the chairmanship  of Shri. T.V. Mohandas Pai, to examine, deliberate  and advise  SEBI on an ongoing basis on the following:

- Recent and medium term trends (within next 5 years) in Finaacial Technology  (Fin Tech) developments  in the securities  market world wide.
- Opportunities  and challenges  from new FinTech solutions and their impact on the Indian securities  market. I1

- i11 FinTech solutions for further widening and deepening  of the Indian securities market through
- (1) Financing platforms.
- (2) Enhancing  market  access  and mobilization  of household savings through new delivery channels offinancial  products, investment advisory  and portfolio  management services.
- (3) Automated trading systems and other such systems including  those  driven  by algorithms.
- (4) Reducing the cost of transactions  and enhancing  the ease of doing business  through  nerv Fintech tb make Indian  markets globally more competitive.
- Approach and framework  for regulatory sandbox in Indian market conditions to facilitate adoption of FinTech and promote financial innovations. lv.
- Preparing  the Indian  securities market.and regulatory  framework to adopt new FinTech  solutions while promoting market integrity, market development, consumer protection  and managing market disruptions.
- VI Assessing  technological solutions  for SEBI's regulatory functions viz. information management and data mining, risk management  including  cyber  security,  intermediary  supervision,  consumer protection,  etc. through  application  of new technological  solutions.
- vii. Technology  capacity building  by the Indian securities  market  and SEBI.
- viii. Cyber security at system level for the securities  market and suggesting  the creation of cyber security  standards-
- ix. Technoiogy  Risk Management Framework  for market participants  and for the securities  market.
- x. Any other issues relevant to application  of FinTech  in the Indian securities  market.

(c) and  (d):  The Reserve Bank of India (RBI) has fuformed  that in view of the increasing  significance of Fin Tech imovations and their interactions with the flnancial sector,  the Financial Stability and Development  Council-Sub  Committee  (FSDC-SC)  decided  to set up a Workiog  Group to examhe  the granular aspects of Fin Tech and its implications so as to review and appropriately  re-orient the regulatory  framework. Accordingly,  the RBI set up an inter-regulatory  Working Group in July, 2016. The fina1 report of the Working  Group has been submitted to the RBI and tle same is being examined-