Mumbai: SEBI is planning to set up a mechanism for 'risk profiling' of listed companies and various market intermediaries, including stock brokers. This move will help in regulating the marketplace and strengthen its surveillance system.
It has also been working on a formalised risk-based supervisory approach for various market intermediaries, for which it has set up a 'Risk Based Supervision Task Force'. It aims at understanding the supervision needs for each class of entities regulated by it.
Both quantitative and qualitative task force measures will help in identifying and defining various risk metrics. It will also be submitting its report soon, and thereafter, the implementation of the recommendations would be taken up across various classes of intermediaries, he added. As part of its focus areas for the current fiscal, Sebi plans to considerably beef up its market surveillance capabilities.
’As part of these plans, SEBI also plans for a systemic approach to establish a mechanism for risk profiling of companies and stock brokers, among others, to understand the associated risks,’ said the official. While special focus would be laid on capacity building for effective integrated surveillance, particularly of derivatives markets, the skill sets would be enhanced this year for using analytical and statistical tools to facilitate effective surveillance.
It is also working on profiling of major clients in various segments to better understand the pattern of market participation and their impact with special emphasis on algorithmic and high-frequency trading, among others, the official added.The ministry has also set up different working groups to carry out risk assessments of every financial sector in India with regard to risks posed by money laundering and terrorist financing, among others.
A group for the securities sector has also been set up comprising of representation from SEBI, stock exchanges, depositories, associations of intermediaries and the Financial Intelligence Unit-India (FIU-IND).Work on the risk assessment by this group would be carried out in 2014-15. Further, India would be evaluated by the global body FATF (Financial Action Task Force) in financial year 2016-17 on technical compliance and effectiveness analysis with the revised FATF standards.
