Not shy about being 'harsh' on violators: Sinha

| | Mumbai
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Not shy about being 'harsh' on violators: Sinha

Tuesday, 28 February 2017 | PTI | Mumbai

Sebi has been justly “harsh” with those threatening the integrity of capital markets and is not “shy” about it, the outgoing chief UK Sinha said today as he favoured uniform treatment while acting against lapses irrespective of the corporate being “big or small”.

 As the regulator makes efforts to protect the interest of investors and safeguard the markets from manipulations, Sinha said, a new set of norms are being worked out to curb misuse of social media as also looking at slapping higher penalty for misuse of high-speed algo trades.

  Sinha, who would be demitting office on March 1 after being at the helm of the Securities and Exchange Board of India (Sebi) for six years, sent out a stern warning that action would be taken against violators.

In his last press conference as Sebi chief, Sinha said Sebi has worked hard on “cleansing of markets” and all potential instruments of manipulation, including defunct regional stock exchanges, have been closed down.

A major effort has been to ensure “uniform treatment” for everyone and also promote competition, Sinha said and mentioned that around 345 companies have been delisted.

He said: “The idea is that if we see that there is some entity which could be a potential threat to the integrity of the market, we have acted very hard on it.

“I have read comments and I am aware that there are comments that Sebi has been very harsh in this period. Well we have been. I don’t think we will feel shy about saying that.

“Wherever we have found there are aberrations, violations we have taken action. I am sure this has given comfort not only to domestic investors... But also FPIs.”

With regard to algo trades, the outgoing Sebi chief said the regulator is looking at imposing a bigger penalty for misuse of the system and is also “following up” on full implementation of directions it issued in the NSE case.

While emphasising that India is one of the very few countries which has some mechanism for preventing misuse of algo trading, Sinha said the regulator is reviewing whether the penalty for misuse should be increased.

As he completes his long tenure, Sinha said one significant regret is that not even one Real Estate or Infrastructure Investment Trust could get listed during his tenure, though he expects this to happen within two months. A new set of regulations is being planned to keep a tab on misuse of social and digital media platforms for “misguiding investors” with false promises of high returns.

Attempts of the watchdog for putting checks on social media being used to lure gullible investors have been criticised in some quarters.

“Sebi’s attempt has been not to allow misuse of social media. That is our limited task,” he said, adding that if bulk SMSes are being sent guaranteeing assured returns, then the regulator is not comfortable with it.

“Unfortunately, a bogey of curtailment of freedom of speech was raised but it’s for you to decide if checks against misguiding investors and falsely assuring them of high returns is curtailment of freedom of speech... After these comments have been received, we are re-looking into the matter,” he added.

On the Government’s move to impose 10 per cent long Term Capital Gains (lTCG) tax related to purchase of shares in unlisted entities, Sinha said it was a good move but there needs to be more clarity.

While mentioning that he is leaving with good memories, Sinha said that one of his significant regrets is that he could not see a REIT or InvIT being launched during his time.

“I was hoping and hoping that I will be able to see it... I am sure that in less than two months from now, the first InvIT will be launched. This is the feedback I am getting from the participants...,” he said.

While emphasising that the reason for no InvIT or REIT getting listed is not due to Sebi, Sinha sought to put the onus on other regulators.

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