Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch said on Monday (March 11) that the regulatory body is planning to implement additional disclosures as an initial measure concerning small and medium enterprises (SME) Initial Public Offerings (IPOs).
Expressing concerns over instances of price manipulation observed at both IPO and trading levels concerning certain SME IPOs, Buch highlighted the need for increased transparency and vigilance in the market.
Looking to implement additional disclosures as a starting step with respect to SME IPOs. #SEBI monitoring price manipulation instances at IPO, trading level w.r.t some SME IPOs, says SEBI Chairperson Madh abi Puri Buch pic.twitter.com/INpTFdxXDa
— CNBC-TV18 (@CNBCTV18Live) March 11, 2024
Buch specifically mentioned the ongoing monitoring of price manipulation instances and emphasised SEBI's commitment to ensuring fair and transparent practices within the IPO space.
She said, "SEBI is actively monitoring instances of price manipulation not only at the IPO level but also during trading activities, especially in the context of SME IPOs."
In response to a query regarding specific cases, Buch clarified that there was no evidence of coordinated efforts in any recent case.
She assured that regulators are diligently sharing information on an ongoing basis, allowing for independent actions to be taken to maintain market integrity.
She stressed on the implementation of algorithm-based compliance checks across all market intermediary segments.
Furthermore, SEBI is taking measures to safeguard small-cap investors, particularly in the context of potential redemption pressures.
"Stress testing small-cap funds will provide valuable insights into the outcomes in case of major redemption pressures, ensuring that investors are protected against the 'first mover advantage'," she said.
Highlighting concerns over certain segments of the market exhibiting frothy behaviour, the Sebi chairperson stressed on the importance of maintaining stability and fairness in the financial markets.
Last month, the Association of Mutual Funds in India (AMFI) issued an advisory to mutual funds taking cognisance of a significant influx of funds into small and mid-cap segments.
Investment committees have been urged to disclose information on how they plan to accommodate large redemptions, the potential impact on portfolio value, and the liquidity held to meet outflows.
(Edited by : Amrita)
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