The Securities and Exchange Board of India (SEBI) recently said that it has seen signs of price manipulation within the small and medium enterprises (SME) segment. In response to these findings, SEBI is implementing a series of strategic actions aimed at enhancing market integrity and protecting investors.
SEBI is focusing on enhancing disclosures to investors, emphasizing the distinct risk profile of the SME segment compared to the mainboard. The aim is to ensure investors are fully informed about the unique regulatory compliances and disclosure requirements in the SME space. Buch noted that while the proposal for increased disclosures is still in development, it is a crucial step towards transparency.
To combat potential fraud, SEBI is diligently gathering evidence of price manipulation at both the IPO and trading levels. Utilizing advanced technology and feedback from market participants, the regulator is building robust cases to take decisive action against malpractice. This collaborative approach with the industry seeks to preserve investor trust in the ecosystem.
Additionally, SEBI aims to provide higher quality information to investors in the secondary market. By enhancing the content and relevance of warnings issued on brokerage platforms, the regulator seeks to empower investors to make informed decisions.
A groundbreaking approach involves the use of artificial intelligence (AI) to scrutinize IPO filings more efficiently. By automating the examination of public documents, SEBI intends to quickly identify disclosure gaps, significantly improving the quality of document review. This initiative reflects SEBI’s commitment to leveraging technology for market supervision, demonstrating a forward-thinking approach to regulatory oversight.
By enhancing disclosures, building solid legal cases, improving investor information, and deploying AI, SEBI is setting a robust framework to deter and detect market manipulation.
