Market regulator SEBI on Friday said it is looking into over 3,500 corporate frauds allegedly held at stock exchanges and said it could set up a committee of IT experts to develop a mechanism to curb such activities taking place using skills acquired from information and communication technologies.
"SEBI is looking to 3,656 cases of corporte frauds at stock exchanges. In 2007, the regulator received complaints of 169 corporate frauds, majority of which were of market manipulation," SEBI Whole Time member T C Nair said.
He said the regulator was examining to the set up a committee of experts drawn from IT and communications field to examine ways to prevent corporate frauds.
At an Assocham conference on corporate fraud, Nair said the Securities and Exchange Board of India would come out with a circular within a month making it mandatory for stock exchanges to audit all transactions annually.
He said, "Lot of corporate frauds are feared to be happening through information and communication technologies. Sometimes fraudsters are ahead of regulator".
The success rate of the market regulator in detecting unfair trade practices in the capital market is about 80 per cent and currently SEBI is disposing off 3,656 cases of either corporate frauds or unfair trade practices, Nair said.
He said SEBI has decided to make it mandatory for stock exchanges and depositories to annually audit all their transactions as per new code of conduct.
SEBI would ensure that stock exchanges and depositories are safeguarded from unfair trade practices through this circular so that investors are not misled or deceived and disclosures of business transactions are recorded in a transparent manner in books of accounts, said Nair.
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