Daijiworld Media Network - Mumbai
Mumbai, Nov 1: The Securities and Exchange Board of India (Sebi) is working towards removing companies with no economic activity from stock exchanges, citing potential risks to investors from their continued presence in the listed space, Sebi chairman Tuhin Kanta Pandey said on Saturday.
Pandey said several listed companies have no economic activity and could expose investors to market manipulation. “They pose a potential danger to investors, and therefore, it is necessary to remove them from the listed space. We are making efforts towards their delisting,” he said at a programme.
He stressed that addressing the presence of such companies was important for maintaining market integrity, as their continued listing could expose more investors to risks, particularly through social media groups. Some manipulators use these stocks for “pump and dump” operations, he said.
Pandey added that Sebi was deploying artificial intelligence (AI) techniques to track and scrutinise suspicious accounts, alongside several other measures aimed at preventing retail investors from falling prey to such schemes.
On the small and medium enterprises (SME) listing platform, he said the regulator had proposed several changes through a consultation paper to strengthen the framework, while acknowledging concerns over some older companies.
Regarding foreign portfolio investors (FPIs), Pandey said Sebi would soon issue another consultation paper proposing relaxations in certain regulations, particularly those concerning disclosures and concentration limits. The paper is expected in the coming weeks.
He noted that FPIs operate across global markets and make investment decisions based on post-tax returns in dollar terms. Their decisions are influenced by corporate earnings prospects, the emergence of new sectors, currency movements, US Federal Reserve interest rates and global bond yields.
Pandey said Sebi was working to make the regulatory framework as seamless as possible for FPIs, both during onboarding and throughout their continued operations in the Indian market.