The International Advisory Board (IAB) of the Securities and Exchange Board of India (SEBI), on Tuesday, suggested heavy penalty besides ‘naming and shaming’ to deal with insider trading and other offences in the securities market.
The IAB also suggested that the market regulator should publicise major insider trading cases in a separate section on the SEBI website for easier access and encourage an effective whistle blowing framework in the securities market by ensuring adequate legal protection of whistle blowers.
The IAB, while deliberating on the formula-based determination of consent mechanism, suggested judgmental variations in consent amount on a case-to-case basis so as to make it effectively deterrent in nature. On real estate investment trusts (REITs), the IAB suggested for the gradual expansion of REITs to include retail investments and a separate framework for infrastructure investment trusts.
Discussing on cyber security, the IAB stressed the need for having adequate disaster recovery system (DRS) and business continuity plan (BCP). It also suggested the need for development of corporate bond market, strong auditing and reporting standards and protection of minority shareholders’ interest.
Interestingly, the IAB observed that slowing down of growth in Indian economy is more attributable to internal factors rather than external. SEBI had constituted the IAB in September, 2011, as part of the measures initiated by the capital market regulator to respond to the challenges arising out of the global financial crisis.