The Sebi Board meeting, which is scheduled to be held during this week, has some wide-impact making topics to be discussed on its agenda. They are:
- Revisiting its directive on ‘loan default disclosure’, wherein every listed company is legally bound to report to the stock exchange about default in loan payments to banks or financial institutions within one working day of their occurrence
- Probe into circulation of unpublished price sensitive information through WhatsApp messages and several other non-public social media modes about numerous companies listed on the stock exchange
- Need for fine-tuning insider trading norms for tackling such leaks
The cloud of bad loans amounting to Rs 8 lakh crore looming over banks had propelled the government and RBI to take urgent steps in that regard. In this context, Sebi had introduced the ‘loan default disclosure’ directive in August.
However, on the advice of banks and financial institutions, Ajay Tyagi, the Sebi head had put the implementation which otherwise was to come into effect on October 1, on hold ‘until further notice’. The explanation forwarded by the banks was that since the Indian credit market functioned differently from its counterparts in the Western countries where such a disclosure was legally binding; they needed more time.
Additionally, Sebi also took serious action after it conducted a probe into the alleged circulation of price sensitive information about several listed companies on WhatsApp groups before their quarterly results were announced to the public. As per Sebi regulations on insider trading, trading based on unpublished price sensitive information is prohibited. So, when the above reports surfaced, the regulator initiated a probe and based on the findings exercised its search and seizure powers.
This led to a search of premises of about 30 market dealers and analysts last week wherein several documents, laptops, mobiles and computers were seized by Sebi. Operation of this scale was one of the firsts since Sebi got its search and seizure powers.