Measures initiated to streamline KYC: Sebi

The market regulator Securities and Exchange Board of India (Sebi) has initiated measures to protect interests of small investors, to streamline know your customer (KYC) norms and to revisit the norms relating to insider trading, according to its chairman U K Sinha.

Speaking at an investor protection event, he said Sebi is in talks with the RBI, Irda and the ministry of finance for a common KYC. Sebi is of the view that a single registration with a financial sector regulator would serve the purpose of KYC and Aadhaar could be one of the bases for opening a KYC account.

Different regulators have different KYC criteria. For instance, norms were different for a mutual fund investor, a secondary market investor and a primary market investor. Now, that is done away and a KYC in any agency within Sebi’s domain will suffice for all transactions within the capital markets, he said.

On several scrips getting traded at less than issue price, he said in the past three years, there has been a situation where some are continuously trading below the issue price. To ensure that investors’ interests are protected, Sebi has recently put more obligations on the merchant bankers about disclosure about companies and their own track record. Sebi could reject the offer document for trying to manipulate the market. As a result, they cannot enter the market for a year.

The market regulator has also called for views of investors on a proposal of safety margins in the IPOs and a call on this would be taken shortly. A committee is being set up to revisit the norms for preventing insider trading and it would give its recommendations by next year.

Sebi has opened its local office in the city as part of its efforts to reach out to investors across the country.

krishnamohan@mydigitalfc.com

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