Signs of price manipulation in SME segment: Buch

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Sebi chairperson Madhabi Puri Buch on Monday cautioned the investors on price manipulation in small and medium enetrprises segment. She said the manipulation is both at the IPO level and also in trading.

“We do see the signs (of price manipulation), we have the technology to do it. We are able to see certain patterns. I’d say it is still on the kitchen table, it’s not yet gone into the oven,” Buch said while meeting women reporters in Mumbai.

She said the capital markets regulator is still working with advisors to understand all the dimensions and analyse the data, adding that if it finds some malpractices the next step may be to issue a public consultation on it.

She said the investors need to understand that the SME segment is different from the main board and it is necessary for Sebi to underline the same in terms of the rules on disclosures which are made to investors. Regulations governing the SME segment, the disclosures, and therefore, the nature of risk are all different, she added.

Just last week Sebi had warned of “froth building up in small and midcap segments” amid continuing inflows into mid- and small-cap funds. Sebi had asked mutual fund trustees to look into “appropriate and proactive” measures, including but not limited to moderating inflows, portfolio rebalancing, etc. After Sebi’s letter, industry body Association of Mutual Funds in India also asked its members to take steps to safeguard the interests of investors.

With inputs from PTI