Press Information Bureau

Government of India

Ministry of Finance

06-December-2012 17:39 IST

Securities and Exchange Board of India (SEBI), the market regulator, has received complaints against some entities regarding alleged illegal trading of shares in various parts of the country.

Whenever SEBI receives such complaints, the same are taken up with the stock exchanges, with an advice to examine the matter and report back to SEBI. In terms of the provisions of the SEBI Act, 1992 and Regulations made there under, SEBI has taken enforcement actions against a few intermediaries registered with SEBI, including passing restraint orders, cancellation of certificate of registration of stock brokers involved in such incidences, quasi-judicial proceedings, adjudication proceedings, consent and compounding and filing FIR with the Police. Further, the following measures have been taken by Government and SEBI.

(i) As a preventive measure, SEBI vide circular dated 29.09.2006, had made it mandatory for stock brokers to report off-market transactions to the stock exchange.

(ii) Further, with a view to impress upon the State Governments to take appropriate and timely action, the Government of India and SEBI had also written to all the State Governments and Union Territories, advising them to take urgent steps to contain illegal trading. SEBI, on its part, has initiated training programmes and guidance to State Police Departments to deal with instances of illegal trading.

This was stated by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in the Rajya Sabha today.

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DSM/RS/bs

Illegal trading of shares: regulator enforces reporting and enforcement measures to curb market misconduct and police training programs. Illegal trading of shares prompted regulatory measures requiring brokers to report off-market transactions to exchanges and the use of enforcement tools including restraint orders, cancellation of broker registrations, quasi-judicial and adjudication proceedings, consent and compounding, and referral to police; regulators also urged state governments to act and provided training to police and enforcement agencies.