Citizens' Issues
Uttar Pradesh has 8 fake universities, says UGC
Uttar Pradesh has the largest number of "fake" universities in the country at eight, followed by six in Delhi, the University Grants Commission (UGC) said on Wednesday. It said the country has 21 such bogus universities.
 
There was a university in Lucknow whose matter is being heard before court, the officials said.
 
According the the UGC website, the Varanaseya Sanskrit Vishwavidyalaya, Jagatpuri; Commercial University Ltd., Daryaganj; United Nations University; Vocational University; ADR-Centric Juridical University, Rajendra Place; and Indian Institute of Science and Engineering were notified as fake universities in Delhi.
 
The list includes one institution each in Bihar, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Tamil Nadu and West Bengal.
 
UGC secretary Jaspal Singh Sandhu in a notification said that according to the UGC Act, 1956, only a university established by a central/state/provincial legislation or an institution deemed to be university under Section 3A or an institution especially empowered by an act of parliament was allowed to confer UGC-specified degrees.
 
"Section 23 of the UGC Act prohibits the use of word 'university' by any institution other than an established university."
 
"Therefore, students and public at large are hereby informed that such 21 self-styled and unrecognised institutions, functioning in contravention of the UGC Act are declared as fake, and are not entitled to confer any degrees," the notice said.

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Mahindra's July sales down six percent
Automobile manufacturer Mahindra and Mahindra (M&M) on Wednesday reported a decline of six percent in its sales for June which stood at 36,134 units -- up from 38,466 units in the corresponding month of 2014.
 
“With a normal monsoon till date, an overall positive sentiment and a slew of new launches in the automotive industry, we expect buoyancy in demand going forward," said Pravin Shah, chief executive of the automotive division, Mahindra and Mahindra.
 
"At Mahindra, our recently launched products have been very well received by the customers. We are also happy with our growth in exports and the MHCV (heavy commercial vehicle) segment during the last month," Shah added.
 
The company's domestic sales were down by nine percent during the month under review and stood at 33,282 units from an off-take of 36,452 units during June, 2014.
 
However, exports of M&M rose exponentially by 42 percent and stood at 2,852 units being sold abroad from 2,014 units shipped out during the corresponding month of 2014.
 
Segment-wise the company's passenger vehicle division reported a 15 percent drop in sales during the month under review at 15,880 units from 18,635 units off-take in the corresponding month of 2014.
 
The commercial vehicle segment declined by four percent at 12,737 units from 13,273 units sold in the like month of last year.
 
Utility vehicle segment sales' receded by 12 percent at 14,433 units from 16,492 units sold in the corresponding month of last year.
 
Sales of the medium to heavy commercial vehicle (MHCV) was up 45 percent at 404 units from 279 units off-take in June, 2014.
 
Three-wheeler sales were up three percent at 4,665 units from 4,544 units sold in the like period of last year.
 
The company's shares at the Bombay Stock Exchange (BSE) closed the day's trade up 0.71 percent or 9.05 points at Rs.1,290.25 per equity share from its previous close of Rs.1,281.20. 

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MONEYLIFE IMPACT: Regulators taking stock of the risky algo trading
Last month, Moneylife blew the whistle on high frequency or algo trading taking place in Indian stock markets by going public with a whistle-blowers report on how select investors fixed the system. Financial market regulators, RBI and SEBI are seriously looking at the risky algo trading that can jeopardise interest of retail investors 
 
Financial market regulators, Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) appears to have swung into action against the increasing influence of algorithm trading or high frequency trading (HFT). Last month, Moneylife wrote about algo trading or HFT in India that was possibly going on in National Stock Exchange (NSE). The article, published on 19th June reportedly seems to have alarmed and forced the regulators to take a closer look at gaps in the existing regulations and explore ways of strengthening them. Interestingly, SEBI and the National Stock Exchange (NSE) have maintained a deafening silence on the alarming disclosures in the whistleblowers letter despite multiple reminders by Moneylife before and after publishing the report. We wrote to the SEBI Chairman UK Sinha, NSE chairman Ravi Narain, and managing director Chitra Ramakrishnan seeking their reaction to the letter. 
 
The Financial Stability Report (FSR) for June 2015 released by RBI on 25th June, has warned against the rising popularity of superfast algorithm trading, saying its complex coding and ultra-low latency due to its advanced communication platforms increase risks of erroneous trades and manipulations in stock markets. Further, the fact that the share of algo orders in total orders and the share of cancelled algo orders in the total number of cancelled orders is around 90% creates concerns relating to systemic risks, the FSR says.
 
According to the report, volumes in algo trading and HFT have increased substantially over the past few years in the cash segment to about 40% of total trades by March 2015 on both exchanges from 17% on NSE and 11% on BSE in 2011. The report is a collective assessment of a sub-committee of the Financial Stability and Development Council that includes all financial market regulators.
 
 
The report also pointed fingers at certain instances of abnormal market movements in Indian stocks, which have been attributed, by market experts, to algo trading or HFT. 
 
On 6 May 2015, the S&P BSE Sensex and NSE's CNX Nifty fell by over 2% wiping out their entire gains for the year, because of strong selling on algo trading platforms, says a report from Reuters. (http://in.reuters.com/article/2015/05/06/markets-india-stocks-idINKBN0NR0D820150506)
 
Moneylife has repeatedly argued that India has no system of monitoring complex automated systems, leave alone complex trading systems which are based on complex mathematical algorithms. Consequently, organisations that operate such technology have become a law unto themselves, supervised by nobody. Even when there is a major glitch or a fat finger trade, no report is put into the public domain. 
 
Moneylife has a detailed document that came by snail mail from Singapore and addressed to Mr BK Gupta, DGM, SEBI. It is dated 14th January 2015 with a copy to Sucheta Dalal. It is not clear what SEBI has done with it in all these months.
 
According to media reports, SEBI is working on rules to regulate algo trading. Quoting two sources familiar with the matter, a report from Business Standard, says,"...among the points under consideration are means to slow down the pace of trading through introduction of measures, including a minimum resting time for orders before execution, and randomising the time priority of orders an exchange receives."
 
"To eliminate 'fleeting orders' or those that appear and then disappear within a short period, a mechanism might be introduced to prevent cancellation or modification of an order until sometime from its submission. We are mulling to introduce a minimum resting period of 500-600 milliseconds," one of the sources told the newspaper.
 
In April 2008, algo trading was introduced in India with the advent of direct market access (DMA). Though these trades are monitored by SEBI, the FSR report expressed apprehensions that they could result in market manipulation.
 
Earlier in January, SEBI tightened controls on its circuit breaker mechanism, in addition to the existing coordinated trading halt in all equity and equity derivative markets nationwide on 10%, 15% and 20% movement either way of the Sensex and the Nifty. 
 
Michael Lewis’s best-selling book, 'Flash boys: A Wall Street Revolt', published in March 2014, has triggered a global debate on algo or high frequency trading. The book discusses rise of high frequency trading in US equity markets and argues that the US markets are rigged by the HFT traders.

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COMMENTS

N Kanitkar

2 years ago

I have noticed something similar when i placed orders in equities. When you look at the 'Best 5 bids and offers' for that stock and placed a buy order with say a price 20 paise more than the highest bidder, an order would appear 05 paise more than mine. So i decided to play it for a while. I kept moving my price up and down but the other order would automatically place an order 05 paise more than mine. It was unnerving.

This is not possible unless i have automated monitoring systems i guess.

V ganesan

2 years ago

The best solution is Ban futures and options in individual stocks.If iam right stock futures derivatives is available only in INDIA.othercountries are having only INDEX FUTURES .My request to RBI SEBI NSE BSE GOVT OF INDIA to look into this very seriously.Thanks for MONEYLIFE EFFORTS AND TO RECOMMEND THE concerned authorities to allow ONLY index futures and options for risk control .Refer my earlier coomment in your article dated 19 th june .Again tahaks.

REPLY

Sunil Rebello

In Reply to V ganesan 2 years ago

The Ban in FNO for individual stocks is necessary - why are we allowing FNO for individual stocks?
i can only think of one reason - our political masters want to wash their BLACK earnings via the Indian Stock market.
Pray that enough pressure is put to ban FNO for individual stocks in INDIA also

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