While an independent consultant recently suggested to SEBI that it increase the headcount by more than 50% within 2-3 years, the regulator now aims to expand its workforce at a faster pace
Having been given greater authority to take on market manipulators and fraudulent schemes, the Securities and Exchange Board of India (SEBI) has begun the process of ramping up the headcount to around 1,000 for faster and more effective execution of powers.
While an independent consultant recently suggested to SEBI that it increase the headcount by more than 50% within 2-3 years, from about 600 employees currently, the regulator now aims to expand its workforce at a faster pace, a senior official said.
The government’s decision to grant greater execution powers and a larger oversight role for potential investment frauds would require SEBI to have a much larger workforce, and the regulator would soon begin hiring officers and other staff members across its various departments and offices, he added.
The regulator has begun internal consultations on its workforce requirements, while it is also considering tapping outside talent pools on case-to-case basis, sources said, adding that SEBI has also begun the groundwork for a large number of prosecution cases it would pursue soon.
A number of entities have not honoured SEBI directives in the past with regard to the payment of penalties, refund of money to investors and other orders. They include entities related to the Saradha and many other cases. SEBI is now working to fast-track its prosecution and recovery cases in these matters, sources said.
Even before grant of greater powers earlier this month through an Ordinance, SEBI had informed its board last month that an increase in headcount is required for the future manpower requirement to take the full ownership of regulatory oversight of all investment schemes, staff requirement in regional offices as well as local offices.
The market regulator had further said that its staff strength also needs to be enhanced to meet its future role and functions, especially when seen in the context of resource allocation to its peer regulators.
The capital market regulator is opening local offices on a pan-India basis for enhanced investor awareness and services.
Speaking at SEBI's silver jubilee celebrations in May, finance minister P Chidambaram had also emphasised on the need for augmenting staff strength at SEBI.
“The country, the economy and the market are too large and are poised to become larger. We need far more than 600 men and women to regulate the stock market,” Chidambaram had said.
On the same occasion, prime minister Manmohan Singh also said that the size and sophistication of the Indian securities market had been increasing at a very rapid pace and SEBI also needs to move ahead accordingly in terms of human and technological capabilities.
Expanding SEBI’s mandate and powers in a major way, the government has now allowed it to pass orders like search and seizure, attachment of properties, arrest and detention of defaulters and pass disgorgement directions to recover the wrongful gains made in contravention of laws.
At the same time, the government has also allowed SEBI to seek information from other regulators within India and abroad with retrospective effect. It paves the way for collection of details pertaining to cases pending for over 15 years now.
In another retrospective change, which forms part of the Securities Laws Amendment Ordinance promulgated by the president last week, individuals and companies being probed by SEBI can settle their pending investigations. Such settlements can be undertaken in cases that are currently pending for more than six years.
SEBI is also gearing up for a large number of requests for such settlements, which have not got greater legal sanctity after promulgation of the Ordinance on securities laws.
To tackle the growing menace of Ponzi schemes being floated as Collective Investment Schemes (CIS), the rules have also been amended to classify any money collection of Rs 100 crore or more as CIS operation. SEBI has been given powers to crack down on illegal investment schemes floated by individuals as well, as against companies only as of now.
However, all government-notified schemes would be out of the Collective Investment Scheme framework.
The changes are part of as many as 22 amendments made by the government in three main Acts governing SEBI and its operations—the Securities and Exchange Board of India (SEBI) Act, the Securities Contracts Regulation Act (SCRA) and the Depositories Act—through a 16-page Ordinance.
Among others, SEBI has also been given powers to pass disgorgement orders for amount equivalent to wrongful gains or to losses averted by contravention of regulations.
Besides, the regulator can now enter and search buildings, places, vessels, vehicles and aircraft of defaulters. Its officers can also break open the lock of any door, box, locker, safe almirah, etc to get information from suspected entities.
The Ordinance also paves way for setting up of special courts to expedite hearing of cases involving contravention of securities laws.
SEBI has also been given direct powers to attach properties and bank accounts of persons and companies failing to comply with directions, involving payment of penalties, refunds to the investors and other dues. The regulator can also order arrest and detention of defaulters in prison.
The indices may try to rally next week, but upmoves will be weak and downmoves will be strong
The market snapped its four-week winning streak and settled lower on growth concerns and nervousness ahead of the Reserve Bank of India’s (RBI) quarterly policy review, due on 30th July.
The Sensex lost 402 points (1.99%) to close the week at 19,748 and the Nifty settled at 5,886, down 143 points (2.37%).
The market settled marginally in the positive on Monday, after engineering major L&T’s quarterly number failed to meet market estimates. The benchmarks settled higher on Tuesday on support from fast moving consumer goods, power and realty sectors. However, on Tuesday night the Reserve Bank announced measures to curb liquidity in order to strengthen the rupee. This immediately led to a break in the upmove that had started on June 26th. On Wednesday, the indices fell sharply.
The market fell further on Thursday, the day of futures and options expiry when ITC, one of the strongest stocks in the market reported June quarter results that failed to meet market expectations. The indices closed further down on Friday on selling pressure in rate-sensitive sectors like metal, realty, PSU and banking after RBI announced further tightening measures.
BSE IT (up 2%) and BSE TecK (up 2%) were the top sectoral gainers in the week while BSE Capital goods (down 10%) and BSE Metal (down 7%) were the top losers.
The major gainers on the Sensex were Hero MotoCorp (5%), Sun Pharma (3%), Bajaj Auto (3%), Infosys (2%) and Bharti Airtel (2%). The leading losers on the index were Larsen & Toubro (13%), Jindal Steel & Power (10%), Tata Steel (9%), Hindalco Industries (9%) and BHEL (9%).
The week saw signs of euro zone recovery contrasted with weaker Chinese PMI data. China's manufacturing weakened further in July, signalling the worst of the nation's slowdown has yet to be reached, according to a preliminary survey of purchasing managers. The reading of 47.7 for an index released today by HSBC Holdings Plc and Markit Economics was less than estimated.
German and French PMI surveys both beat expectations. Overall, the business polls indicated that the euro zone economy was likely to grow in the current quarter.
UK economic growth accelerated in the second quarter as all main industries showed expansion for the first time in three years, indicating Britain’s recovery is gaining traction. Gross domestic product increased 0.6 percent from the first quarter, when it rose 0.3 percent, the Office for National Statistics said in London today. US Futures were also trading deeply in the red.
On Friday, the rupee rose to a five-week high as the Reserve Bank of India's aggressive defence of the currency showed some signs of success, but at the cost of equity markets.
If the Nifty closes below 5,835, the index may head much lower while a close above 5,920 may lead to a short rally
After a volatile session throughout the day, the indices ended in the negative for the third day in a row. Both the Sensex and the Nifty opened well in the positive. The Sensex opened at 19,892 while the Nifty opened 5,938. Both the indices hit their intra day high at the beginning of the session but soon began a downward journey to see some recovery in the last hour of the session. However, sharp selling again resumed towards the end of the session. The NSE saw a volume of 58.44 crore shares.
The indices hit a lower high and a lower low today. The Sensex hit a high of 19,907 and the Nifty hit a high of 5,945. The Sensex hit a low of 19,700 and the Nifty hit a low of 5,870, closing almost at the low of the day. The Sensex closed at 19,748 (fell 57 points, fell 0.29%) while the Nifty closed at 5,886 (fell 21 points, 0.36%).
US stocks rose on Thursday, 25 July 2013. Economic data released on Thursday, 25 July 2013, was mixed. Durable-goods orders in June came in better than expected, but weekly jobless claims posted a modest increase of 7,000 claims to 343,000.
Japan consumer prices rose the most since 2008 in June, an early sign that the world's third-biggest economy may be starting to shake off 15 years of deflation. Consumer prices excluding fresh food increased 0.4% in June from a year earlier, the statistics bureau said in a statement today.
Asian indices had a mixed performance. Nikkei 225 fell the most, 2.97% while Hang Seng was the gainer, rising 0.31%.
Among important news, China ordered companies in 19 industries to cut excess production capacity, raising fear that the demand is set to slow in the biggest consumer of the metal.
Officials working for euro zone finance ministers signed off on the payment of the next batch of aid for Greece on Friday and the money will be disbursed on the approval of member states on Monday, euro zone officials said.
The rupee rose to a five-week high as the Reserve Bank of India's aggressive defense of the currency showed some signs of success, but investors were again set to demand the government pay them handsomely to buy its bonds at an auction on Friday.