Market regulators of India and Mauritius inked a crucial agreement, on Thursday, for sharing of information on securities dealings, which would assist Sebi to dig deep into the securities scam of 2000-01 and prevent similar incidents in future.
The memorandum of understanding, signed by the Securities and Exchange Board of India and Financial Services Commission of Mauritius, envisages assistance in discovery of and taking action against insider trading, market manipulation and other fraudulent practices in securities dealing.
"This is a general agreement. We have been looking at incidents (of market manipulations) that have already occurred," Sebi chairman G N Bajpai told reporters, adding the MoU will assist the regulator to investigate live cases of securities scam of 2000-01.
The agreement assumes importance in view of the stock market scam of 2000-01, when some brokers used the Mauritius route to siphon off the scam money.
Admitting that there were "legal impediments" earlier, Mauritius Minister for Economic Development, Sushil Khushiram, said the country has amended laws for facilitating regulators to cooperate in investigating scams and market infringements.
"With this MoU, we see a decline in recurring problems and increase in the long term sustainability in economic cooperation between the two countries," he said.
The agreement also covers enforcement of laws, supervising securities and derivatives markets, clearing and settlement activities, takeovers and mergers.
The two countries would sign another agreement for prevention of money laundering after India enacts the requisite legislations.