SEBI Chair Says There Are Signs Of Manipulation In The SME Segment

There are “signs of manipulation in the SME segment”, said Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch.  She was talking on the side-lines of an AMFI event in Mumbai on March 11, which was for facilitating women fund managers. She said that, “We do see signs of manipulation in the SME segment. Market has given its feedback. We are working on robust evidence and feedback for action.”

She said that the market regulator was to be a facilitator and to provide a listing atmosphere which was not as the main board, meaning to say, not as well regulated because, the small and medium enterprises would find it difficult to adhere with many of the necessities, reported moneycontrol.

The market regulator has received some feedbacks from entities that that the facilitators framework was being misused. SEBI has taken measures to set it under control. The steps are, to bring in measures such as Additional Surveillance Measure (ASM) and Graded Surveillance Measure (GSM), these measures were not brought into the SME board before. This also comes as a stern warning to the manipulators.

Buch said that for these entities, manipulation was relatively easy. These entities were comparatively small, where, for them, the market cap and free float is also small, thus, making it smooth to manipulate at the trading level and also at the IPO level. She also added that to counter these, more disclosures should be put in place. “Looking to implement disclosures as a starting step with respect to SME IPOs,” she said.

She said that, the move to find the real manipulation in stock price at the IPO and trading level were being taken up. The Chairperson added more on this, saying that, “we are able to see certain patterns. However, as per our regulation, the way that we need to construct the entire case, we do need to take some time to do that in a robust manner.”

Ms. Madhabi Puri Buch, the was appointed the chairperson of the securities regulatory body – Securities and Exchange Board of India in the year 2022. Since 2017, she is a full-time member of SEBI. She is the first woman chairperson to hold the helm at SEBI. Ms. Madhabi Puri Bach is an alumnus of Indian Institute of Management, Ahmedabad.