Sebi sets 1-year target to complete probes; 221 cases underway

In a major overhaul of its functioning, capital markets watchdog Sebi has fixed one-year target for completion of all its investigations, while sharply focusing on cases involving bigger offences.

Under the new system, put in place as per recommendations of an independent consultant, this 12-month target would apply to all the cases where an investigation has been initiated this year onwards, Sebi Chairman U K Sinha said.

At the same time, the Securities and Exchange Board of India has expedited its probe into all long-pending cases and their numbers have been brought down drastically.

"There are 221 investigations pending with Sebi right now.

“Out of these, there are only 20 cases that are more than three-year old and 86 cases are of one year or less," Sinha told PTI in an interview.

The Sebi chief also gave a stern warning to those indulging in bigger offences, saying that such cases were being dealt with extra focus and most of the smaller offences were being prevented very effectively by a robust surveillance system put in place at the regulatory authority.

At the same time, the surveillance mechanism is also ensuring a continuous pipeline of cases for further follow-ups including by way of investigations, Sinha said.

Expressing confidence that the new target would be achieved, the Sebi chief said that the regulator began working on this new system nearly two years ago.

"There used to be a feeling, and at times rightly too, that our investigation process used to take a lot of time and we have been rapped by our appellate tribunal that cases have been going on for five years or ten years. . .

"What we have done now is that all the cases, from this year onwards, will be closed in 12 months.

“So, no case will remain pending after one year, and I am making a very responsible statement, and we are going to achieve this target," he said.

Sinha said Sebi is already moving in that direction and the number of cases that are more than three years have come down drastically.

According to Sebi's latest annual report, it completed 120 investigations in the previous fiscal 2013-14, which included 73 cases of market manipulation and price rigging. During the year, it also took up 108 new cases for investigation.

Other probes pertained to insider trading and takeover violation cases, among others.

During the past 10 years, Sebi has initiated 1,880 investigations, while it has completed 1,659 cases.

Sinha said Sebi has created a very strong electronic surveillance mechanism also.

"Earlier we were able to capture the transactions in only one exchange and we had to ask for data from other exchanges for further information.

"At times, it also used to take months to analyse that.

"Now we have put in place a Data Warehousing Business Intelligence System through which we are getting simultaneous feed from all the exchanges.

"This is a major technological advancement that we have done and our surveillance mechanism is giving us a lot of pipeline (of cases for further investigation)," he said.

"I would also like to tell you that we read media reports very seriously.

“There are people whose job is to read your reports.

“And wherever we find that something wrong is happening we follow-up on those cases," Sinha said, while adding that investigations are launched whenever necessary.

In addition, the Sebi chairman said, the revamped systems for investor grievance redressal and new supervision measures for secondary markets are also ensuring a much more effective surveillance system.