Lok Sabha Question No. 4066 (UNSTARRED), answered on 2016-12-09
Subject: Spurt in Stock Prices
Ministry: FINANCE
Asked by: ASHOK SHANKARRAO CHAVAN, SUNIL BALIRAM GAIKWAD, GAJANAN CHANDRAKANT KIRTIKAR, SUDHEER GUPTA

## Governrnent  of lrrdia M inistry of Finauce Departnrent  of Economis  Affairs

## LOK SABHA UNSTARRED  QUESTION  NO" 4066 To BE ANSWERED oN F'RrDAy, 9th DECRMBET., 2016/ AGRAHAYANA t8, 1938 (saka)

## SPURT IN STOCK PRICES

## OUESTION

## 4066. SHRI ASHOK STIANKARRAO CHAVAN; DR. SU1VL BALIRAM GAIKWAD: SHRI GAJANAN KIRTIKAR: SHRI SUDHEER GIJPTA:

Will the Minister of FINANCE  be pleased  to state:

- (a)  whether the Government is aware that prices of small cap\_and  penny shares have shown  sharp spurl in iheir stock prices or a surge in trading volume despite  weak fundamentals  during the recent  past;
- (b) ifso, the details thereofand  tlre reasons therefor;
- (c) whetlrerthe Government has enquired into tlre matter  and sought clarification  in this regard and if so, . the details thereof; and
- (d) the steps  takerr/being  taken by the Government  to check the manipulation  in the prices of such shares?

## AI\SWER

## MINISTER OF STATE IN TTIE MINISTRY OF FINANCE (sHRr ARJUN RAM MnGHWAL)

(a), (b) and (c): Yes Madam.  Tlre Securities'and  Exchange Board of India (SEBI) has informed that as part ottits  on-going surveillance mechanism-as  well as inputs received  from stosk exchanges and other agencies, it had come to SEBI's notice  that companies  which were either non-operational  or had weak fundamentals and unsupportive  price volume  movernents were being used by entities for manipulation'

Accordingly, during the period  1ut January, 2014 to 30th November,2076,as  a surveillance  nleasure, SEBI lras passedbrders  under Section 11(B) of the SEBI Act,1992  in the case of 13 such companies  and debarred  f336 entities.  Furtlrer, based on SEBI's directions, as a surveillance  measure,  tJre stock  exchanges have also suspendecl trading iri the shares  of 203 companies. In addition, in the case of the shares  of 160 companiqs, their price bands were reduced to tlre lowest  band of 2 per cent by the exchanges.

(d)  : SEBI maintains constant  vigil in the market arrd in case of any abnormality,  takes appropriate  actiott against  the concemed entities.  Tlie systems  and practioes  are in place to prcmote a safe, transparent  and eificient  nrarket  ancl to protect  market  integrity.  The systems irrstituted include  advanced  risk management mechanisms oomprising  continuous  monitoring and sunreillance, various lirnits on positions,  margin requirements,  circuit filters,  etc. Further, the systems and  practices  are reviewed  contitruously  and modified to meet ernerging needs.

SEBI als6 monitors  trading activities  in addition  to ovefseeing the surveillance  functioning of the stock exclralges. A,ny aberratiorrs  noted in trading activity, repofts from stock exchanges and the complaints received  are examined  by SEBL  In cases in which any violation  of SEBI rules and regulations is observed, appropriate  action as watranted  is taken by SEBI against tlre concerned entities.

Further,  SEBI has also been oonducting regular meetings  with officials of tlre stock exchanges and depositories wherein  SEBI has aclvised tlrenr to step up tlreir own surveillance  measures  and to initiate expeditious demonstrative aetion wherever wamanted so as to protect investors' interest  and ensure  orderly functioning  of the stock market.

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