Suggesting sweeping reforms, a high-level committee has recommended market watchdog Securities and Exchange Board of India (Sebi) to seek powers to intercept phone calls to aid investigations and also grant immunity to whistleblowers blowing the lid off frauds and other violations.
The committee suggested a series of changes in rules on market frauds, insider trading, surveillance and investigations, while recommending mandatory whistleblower policies at listed firms and a searchable list of all immediate relatives and persons living at the same address with those in possession of price-sensitive information, reported PTI.
Many recommendations assume significance in the wake of several high-profile cases being probed by Sebi and other agencies where relatives of senior executives, as also various employees, at listed companies have come under scanner, the report said.
These cases include those related to ICICI Bank Ltd, Videocon Industries Ltd as also a number of top blue-chip firms such as HDFC Bank Ltd, Axis Bank Ltd and Tata Motors Ltd where sensitive financial information allegedly got leaked over WhatsApp before their formal announcements, it added.
The panel, headed by former law secretary and Lok Sabha’s ex-secretary general T.K. Viswanathan, said such information should be readily available with the listed companies and market intermediaries to be provided to Sebi whenever asked, as also an electronic record of all persons with whom price sensitive information is shared.
Making public the 116-page report by the committee, Sebi said it has suggested that the regulations against frauds should also cover all market participants and their employees as well as agents of intermediaries. Sebi has sought comments from public on the committee’s recommendations till 24 August, the PTI report said.
The committee was set up in August last year as it was felt that a strong legal framework and strict enforcement actions are required to deal with market abuse and ensure fair market conduct in the securities market, it added.