Sebi Chairman Tuhin Kanta Pandey announced that automated systems will be deployed to identify listed businesses that maintain minimal economic operations. The initiative is designed to safeguard inexperienced traders who often suffer heavy financial losses when artificially inflated low-cost shares experience sharp price corrections. Beyond domestic surveillance, the regulator is finalizing a consultation paper to align compliance norms for foreign institutional investors with global standards.
Key points
Regulators are targeting inactive listed firms to eliminate vehicles frequently used for…: Regulators are targeting inactive listed firms to eliminate vehicles frequently used for illicit market manipulation.
A forthcoming consultation paper will evaluate ways to bring foreign institutional invest…: A forthcoming consultation paper will evaluate ways to bring foreign institutional investor compliance in line with international benchmarks.
Persistent capital flight from foreign funds continues to pressure domestic equities amid…: Persistent capital flight from foreign funds continues to pressure domestic equities amid strong dollar valuations and elevated US treasury yields.
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“These companies pose a potential danger to investors, and therefore, it is necessary to remove them from the listed space. We are making efforts towards their delisting,” Sebi chairman Tuhin Kanta Pandey said Saturday in Kolkata.
Several companies with no economic activity remain listed, potentially creating scope for market manipulation.
Such firms could pose a danger and should not continue to crowd the listed space, Pandey said.
Investors with limited knowledge of the stock market tend to buy penny stocks because they are available at throwaway prices, often below Rs 10 or Rs 20. They risk losing money when prices correct.
According to an ET report on November 1, as many as 10 penny stocks saw their prices fall 35-70% over the past three months.
The market regulator is planning to use an artificial intelligence-based system to monitor companies with minimal economic activity and generate alerts faster, Pandey said.
He also said Sebi is likely to issue its proposed consultation paper on compliance requirements for foreign institutional investors (FIIs) within weeks. The regulator…
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