New insider trading norms in 10 days: Sebi

Nov 29 2013, 00:43 IST
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SummaryPanel report on the 2-decade-old regulations soon.

In order to deal with insider trading cases more efficiently, market regulator Sebi is set to update its two-decade-old norms in the next ten days.

The Securities and Exchange Board of India (Sebi) had formed a 15-member committee under the chairmanship of Justice NK Sodhi in March 2013 to review insider trading regulations. Sebi chairman UK Sinha, while speaking to the media on Thursday on the sidelines of an event in Mumbai, said that the committee is expected to submit its report soon.

“They have almost finalised it. I am informed they are planning to submit it in a week’s time or maximum 10 days,” said Sinha.

While constituting the committee, which include Arundhati Bhattacharya, now chairperson of State Bank of India; Milind Barve, CEO, HDFC AMC; Rashesh Shah of Edelweiss, three Sebi officials and two journalists among others, Sebi had said, “World over, the regulatory focus is shifting towards containing the rising menace of insider trading effectively. To ensure that the regulatory framework dealing with insider trading in India is further strengthened, Sebi seeks review of the extant Insider Trading Regulatory regime in India.”

Amidst growing criticism that offenders were getting away with mild penalties through Sebi’s consent mechanism, the regulator had in May 2012 also amended its consent mechanism and said that it would not settle cases of insider trading and other serious fraudulent practices under the same.

Sebi is also looking to finalise the guidelines for Real Estate Investment Trusts (REITs) for which it had released a consultation paper in October. Sinha informed that the regulator has received number of feedback on the same and will take up the matter in its next board meeting in December.

He said that a favourable tax treatment is required for the product to take-off. “Whatever we decide, REITs will pick up only when there is clarity on tax treatment. So we have taken up this matter with the government,” Sinha said.

The move to introduce REITs may not only attract capital inflows but is also expected to bring in more transparency and retail participation in real estate sector in the country. While REITs will allow retail investors to invest in big real estate properties, Sebi has proposed to initially allow only HNIs/institutions to invest in REITs and has kept the minimum investment size at Rs 2 lakh.

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*Sebi’s 15-member committee under the chairmanship of Justice NK Sodhi will soon submits its report on

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