With an aim to enhance its focus on mobilising household savings into capital markets and to strengthen its supervisory functions, market regulator Securities and Exchange Board of India (SEBI) on Monday decided to go in for a major overhaul of its role, vision and organisational set-up with a stronger workforce and greater IT resources.
The nine-member board of the capital markets regulator decided to implement a plan of action in this regard, following recommendations made by an independent consultant. Among others, it has been recommended that SEBI should impart a greater focus on mobilising household savings into capital market assets, strengthen its supervisory functions and its oversight of listed companies.
Besides, it has been asked to work for a re-organisation of its functional departments, increase its manpower, improve its IT strategy for organisational efficiency and strengthen its training and performance management system.
“The board accepted the recommendations and agreed on the implementation plan for the same,” SEBI said in a statement after the board meeting.
Collective investment schemes
To curb rising instances of public getting defrauded by money pooling schemes, SEBI decided to declare illegal mobilisation of funds as a “fraudulent and unfair trade practice”. Besides, it has clarified that the existing list of activities coming under fraudulent and unfair trade practices can be further expanded whenever the need arises.
Following today’s decision, all activities of money mobilisation through unauthorised Collective Investment Schemes (CIS) would face stronger penalties prescribed under the revised SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations.