SEBI chief Sinha for closer scrutiny of listed firms

Securities & Exchange Board of India chairman U K Sinha said on Monday that the capital markets regulator has embarked upon an exercise to increase surveillance on listed companies and prevent insider trading.

''Companies should also improve internal controls and come clean on financial reporting,'' the new SEBI chairman, who took over from C B Bhave recently, told a meeting of industry body Assocham in Mumbai.

Sinha said capital markets are set to grow fast in coming years as the needs for infrastructure development are enormous. According to government estimates, investments worth $1 trillion are required in the next 10 years to expand and improve the country's infrastructure.

He said SEBI is preparing for the second stage of reforms in the primary as well as the secondary market. As a first step, he has instituted a few committees to look into issues such as the procedures of initial public offerings and the impact of the ban on so-called entry fees on the Rs7 lakh-crore mutual funds industry. The committees are expected to submit reports within six weeks.

Sinha was also emphatic that he would continue SEBI's battle against firms that are not following the rules. Big companies can delay SEBI's decisions because they have financial muscle and can fight hard, but the regulator will not be intimidated by them, he said.

"I would like people to know that be careful, SEBI is watching," he said. "As a regulator, I would put my energy more on deterrence rather than punishment, if there is a choice."