Sebi gets new software tools for fraud detection, probes

Apr 06 2014, 14:18 IST
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With an aim to beef up its capabilities to detect frauds and bring scamsters to book, Sebi is putting in place new software tools to help in its investigations and surveillance activities. (AP) With an aim to beef up its capabilities to detect frauds and bring scamsters to book, Sebi is putting in place new software tools to help in its investigations and surveillance activities. (AP)
SummaryWith an aim to beef up its capabilities to detect frauds and bring scamsters to book, Sebi is putting in place new software tools to help in its investigations and surveillance activities.

cell also works towards improving the quality of financial information disclosed by the companies, besides assisting in detection of financial irregularities.

To enhance the quality of financial reporting done by listed entities, Sebi has set up a Qualified Audit Report Review (QARC) on which auditing regulator ICAI, stock exchanges and other stakeholders are also represented.

With an aim to strengthen its surveillance functions to detect fraudulent and manipulative activities, Sebi is also planning to study market intelligence infrastructure and techniques of regulators in the US, UK, Australia and Hong Kong.

The proposed study will also include the best practices followed in developed markets for surveillance of algorithmic and high frequency trading, an area which has been a matter of concern not only for India but also for many others.

The study is one of the major policy initiatives proposed by Sebi for the current fiscal.

The study would include analysis of their surveillance infrastructure and techniques to decipher patterns in the trading, formation of associations between entities, gathering of market intelligence including linkage of price volume pattern to market information, etc.

With regard to Sebi's capacity building initiatives, an independent consultant has suggested that the regulator needs to undertake technical training, especially in areas like inspection and surveillance, on a much larger scale and the same would be pursued in the next fiscal more vigorously.

At present, Sebi's average training budget per person per year is the lowest among all its peer regulators, while the area of skill development also needs a further fillip.

While Sebi is already working on increasing its staff strength in a gradual manner from about 700 currently, it is looking to achieve quality enhancement of staff through better training and skill enhancement measures, so as to further bolster the supervisory and regulatory capacity of the organisation.

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