Page 14 - Banking Finance December 2022

ROUNDUP

ary 2023 instead of two separate the commitment to ensure a true and losses in trading, executed among
batches, according to a joint state- fair picture of whatever is presented in themselves and even reversed some of
ment from the exchanges. the markets," Buch said, while speak- them. In 2018, Madhabi Puri Buch,
ing at an event organised by Indian
As per the earlier schedule, stocks on SEBI's then whole-time member fol-
Audit and Accounts Department in
which futures and options (derivatives) lowed it up and promised action
Mumbai.
are available are to be transitioned to against entities for sham transactions.
T+1 settlement in two batches - De- She said there are more than 20
Analysis showed the entities generated
cember 2022 and January 2023. Ac- websites in the country which auditors
over 70 per cent of their volumes in
cordingly, exchanges will revise the can use to validate the claim of the
illiquid options in a year. Agarwal had
original schedule for transition of stocks auditee. "While technology is being
investigated entities with over Rs. 5
to T+1 settlement and issue the circu-
used as a tool by fraudsters, we can
crore in loss or profit, responsible for
lar informing the list of stocks to be
use the same technology to evade
the non-genuine trades. In the same
transitioned in December 2022 and
fraud. Auditors can use tools like GSTN matter, in 2018, Buch further identi-
January 2023, the statement said.
portal, bank websites etc…," Buch
fied 14,720 entities. As many as 81.41
said. If there is transparency, then per cent of the trades executed in the
Independence of CAs cru-
market forces themselves act in an
segment were constituted to fall in the
cial for financial state- efficient way and ensure there is no purview of unfair trades and the pro-
wrong-doing in the market, she added.
ments: FM ceedings and entities were imposed
with penalties.
Finance Minister Nirmala Sitharaman
said the independence of chartered Brokers to challenge SEBI's
accountants is very crucial for the trust Sebi issues framework on
amnesty scheme
and integrity of a company's financial
tech glitches
Several stock brokers are planning to
statements.
challenge the Amnesty Scheme 02 of The Securities Exchange Board of India
"The independence of chartered ac-
market regulator SEBI. The scheme, (Sebi) issued a framework to deal with
countants is extremely important and
which closes on November 21, was technical glitches occurring in the trad-
significant for the trust and integrity of
made available by SEBI in August as a ing systems of stock brokers.
financial statements. Therefore, their
one-time settlement opportunity to
responsibility is not limited just to the The market regulator said as rapid
nearly 15,000 entities accused of the
shareholders since statutory filings and technological developments have in-
same offence, which is unfair trading
audit reports are public documents and creased the ease of electronic trading
in illiquid stock options on the BSE.
they are relied on by various stakehold- in securities markets, technology re-
ers, including financial institutions, gov- Brokers told that the scheme lacks le- lated interruptions and glitches and
ernment and common retail inves-
gal sanctity since it defies the principles their impact on the investors' opportu-
tors," Sitharaman said, while address-
of natural justice by excluding them nity to trade have become a major
ing the World Congress of Accountants.
from the amnesty being extended to technology related risk.
their clients. Moreover, the scheme is Under the new framework, which will
Technology driven third-
only limited to one exchange, BSE,
come into effect from April 1, 2023,
party validation needed: while it leaves out other exchanges and
stock brokers will have to inform about
their clients and brokers.
Sebi chief any malfunction in their system or the
Securities and Exchange Board of India A major racket was busted by SEBI in one outsourced from any third parties,
(Sebi) Chairperson Madhabi Puri Buch 2015 when its former member Rajeev leading to stoppage, slow down of op-
pitched for technology driven third- Kumar Agarwal passed an order erations for five minutes or more, to
party validation in the process of au- against 59 entities for trading in illiq- the stock exchanges within one 1 hour
diting to evade frauds. "Sebi's thrust uid options of stocks on the BSE. Then, from the time of occurrence of the
on third party validation is driven by certain entities consistently made glitch.
14 | 2022 | DECEMBER | BANKING FINANCE