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Over 30 entities under Sebi lens for unusual trading on 16 May

LiveMint logoLiveMint 18-05-2014 PTI

New Delhi: More than 30 entities, including brokers and high net worth individuals (HNIs), have come under the scanner of market watchdog Securities and Exchange Board of India (Sebi) for unusual trading activities on the day of Lok Sabha election results.

The trading activities of these entities came to the notice of the regulator on 16 May, the day results of the Lok Sabha elections were declared.

To prevent possible manipulations and excessive volatility in stock trading in the wake of election results, the Sebi had made elaborate mechanism to keep a close tab on the market.

Sources said that more than 30 entities have come under the scanner after Sebi noticed unusual trading volumes pertaining to them on 16 May.

A preliminary enquiry has been initiated to ascertain whether these entities, that includes brokers and HNIs, indulged in suspicious transactions, they added.

The market regulator is gathering information about such transactions from its Integrated Market Surveillance System (IMSS). Besides, data is being collated from the exchanges and clearing corporations, among others, sources said.

A special team at Sebi kept a close tab on the stock market movements, while another team monitored the election results as they were announced to understand whether price movements are linked to outcomes in various constituencies.

Sebi would also be closely watching market movements on Monday to avert any possible shocks.

Earlier sources had said that trends in overseas markets and factors affecting foreign institutional investors (FIIs) were also being monitored continuously.

In the run up to poll results, stock market had touched record highs amid expectations of a stable government coming into power at the Centre. The rally had gained momentum when exit polls pointed towards Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) victory at the hustings.

On 16 May, the 30-share BSE Sensex, which had gained over 1,560 points in five sessions previously, had surged 1,470 points to hit a new life-time high of 25,375.63 in early trade fuelled by hopes that BJP government would fast-track reforms and accelerate economic activity.

The Sensex ended the day at a new closing peak of 24,121.74 points.

Prior to declaration of election outcome, on 13 May, the government had asked regulators, including Sebi and Reserve Bank of India (RBI), to remain alert and take actions to curb excessive volatility. Sebi chairman U.K. Sinha had said that regulations are in place to curb any excessive volatility and the regulator in keeping a very close watch on stock movements.

“There is no need for anybody to worry. If we find that anybody is doing anything wrong, is in violation of any of Sebi’s regulation, we will take prompt action,” Sinha had said. PTI

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