The move follows the recommendation of the high-level co-ordination committee (HLCC) on capital and financial market which met earlier this month and discussed the recent developments in the capital market. HLCC also asked the RBI to form a sub-committee on similar lines for all the entities regulated by it.
Both the regulators have been asked by the apex panel of the financial markets to further strengthen their risk containment mechanisms to impart more safety to both the markets in the wake of the volatility witnessed on the bourses recently. The first meeting of the HLCC sub-committee of Sebi took place on Friday, sources said.
According to informed sources, the HLCC sub-committee of Sebi will be headed by Pratip Kar, executive director in charge of secondary markets, and will also have senior officials from different departments including CS Kahlon, executive director in charge of the investigation, enforcement and surveillance department.
Sebi sources said the HLCC, which met in Mumbai on June 11 under the chairmanship of RBI governor YV Reddy took stock of issues relating to inter-regulatory co-ordination in stock market related developments. It had also discussed the massive fall of the Sensex to the tune of 565 points after the new government came into place at the Centre. It also deliberated at length the Sensexs plunge by 800 points in a day.
The finance secretary; chairman, Sebi; chairman, Insurance Regulatory and Development Authority (Irda) and RBI governor are the permanent members of the HLCC which is a high-level forum for interface among the financial sector regulators.
Although the HLCCFCM meets occasionally, other technical committees /groups formed among RBI, Sebi and Irda, as per its directions, meet frequently to discuss and sort out issues relating to capital market exposure of regulated entities and developments in the financial markets.