Market-makers should self-report misconduct: Sebi

This, she emphasised, is crucial to maintain investor trust—a cornerstone for a growing market.
SEBI building used for representative purposes
SEBI building used for representative purposes(File photo | PTI)

MUMBAI: Markets watchdog Sebi has urged the market-makers to proactively report malpractices, saying there is an urgent need to have trust and integrity in markets so that investors have confidence in the market and the regulator.

Addressing portfolio managers, the Securities and Exchange Board (Sebi) chairperson Madhabi Puri Buch here on Thursday called up on industry stakeholders to proactively report any malpractices within their sectors. This, she emphasised, is crucial to maintain investor trust—a cornerstone for a growing market.

“Trust is the foundation of growth,” Buch told a conference organised by the Association of the Portfolio Managers. “If the trust is belied, the edifice of the system will come down like a pack of cards. It is important that everyone, including the regulators, maintain this trust.”

This regulatory tightening is part of Sebi’s broader efforts to curb potential market manipulation and ensure transparent operations across the financial ecosystem. This call to action assumes importance given that the equity market has been on a song lately, with the Sensex crossing the 80,000-mark for the first time on July 3 in its fastest-ever 10,000-point rally in a just 58 sessions.

Amid this surge, Sebi has been putting in place stricter steps to ensure market integrity, including stringent instructions against brokerages engaging with ‘finfluencers’ and individuals claiming to be investor educators or market experts.

Highlighting the critical role of trust from retail, institutional, and foreign investors in fostering market growth, Buch warned that “any erosion of trust due to industry mischief can lead to more stringent regulations and a potential collapse of the ecosystem.”

To prevent such scenarios, Buch urged the industry to voluntarily report any unethical practices they notice. “Bring to our notice what mischief is going on in the market so as to avoid our exploding into the system and coming up with a heavy hand. Good players should come to us about the mischief in their own interest,” she asserted.

She also urged non-members to join their respective industry lobbies to help ensure all voices are represented.

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The New Indian Express