SEBI launches Manthan- ideathon to promote innovation in the securities market

SEBI launches Manthan- ideathon to promote innovation in the securities market

What is the news:

• SebiChairperson Madhabi Puri Buch  said that India is well positioned to leverage technology in the securities market to deliver customised solutions at a very low cost to individuals across the country as she launched an ideathon to promote innovation.
• Launching the ideathon ‘Manthan’, Buch highlighted that adoption of financial technology (FinTech) in the securities market presents significant opportunities for stakeholders.

About Manthan:

• Manthan is a six-week long ideathon being organised by Sebi in association with BSE, NSE, NSDL, CDSL, KFintech, CAMS, LinkInTime and MCX.
• It will facilitate the creation of a pool of ideas and innovative solutions revolving around the securities market, as per a release issued by Sebi.
• Workable ideas emanating from Manthan, which was launched at a function in Mumbai on Wednesday, may translate into possibilities and prototypes through a hackathon.
• Backed by a rich tradition of entrepreneurship and innovation, India is well positioned to leverage technology in the securities market, to deliver customised solutions at very low cost, to individuals even in the nooks and corners of the country, Buch said.
• According to the release, adoption of FinTech can go a long way in democratising financial services, making services cheaper and more accessible to the masses, thereby laying the corner stone for financial inclusion. Similarly, Regulatory Technology (RegTech) and Supervisory Technology (SupTech) present opportunities to have effective regulation of the market while lowering the cost of compliance for the market participants.

• Buch said the the focus of Manthan is on ideation and that it is Sebi’s belief that every single idea is worth evaluating – participants are encouraged to bring out any idea, even those which may not be achievable immediately.
• Sebi Whole Time Members, Executive Directors, various Sebi committee members and officials from the Market Infrastructure Institutions (MIIs) and RTAs also attended the launch event. They also expressed their optimism on the role that ideathons and hackathons can play in fostering innovation.
• As part of the ideathon, interactive knowledge sharing sessions will be organised for registered participants through webinars to facilitate the submission of innovative ideas.

Other recent news about SEBI:

SEBI forms panel to improve governance norms for market infra institutions

• The Securities and Exchange Board of India (SEBI) on April 4 announced the constitution of an ad-hoc committee which will suggest measures to improve the government norms for market infrastructure institutions (MIIs).
• The panel will be headed by SEBI’s former whole time member G Mahalingam. Other members of the committee are J N Gupta, MD of Stakeholders Empowerment Services; Aarti Nihalani, Partner, Oliver Wyman; Sandip Bhagat, Partner, S&R Associates and Uttam Bagri, Former Chairman, BSE Brokers Forum.
• The managing directors and chief executive officers of NSE, BSE, NSDL and CDSL have also been included in the panel, SEBI said.
• The committee would be tasked with “making recommendations on measures for strengthening the role played by the Governing Board and Committees of MIIs”, the market regulator said.
• They would also be reviewing the requirements related to appointment and role  responsibility of directors on the board and key managerial persons (KMPs), it added.
• The panel would also “developing effective metrics for monitoring various aspects of the functioning of MIIs and KMPs”, “enhancing accountability and transparency” and “reviewing the policy on safekeeping and sharing of information held by MIIs”, the press release issued by SEBI stated.
• Revisiting the “code of conduct and code of ethics” for directors of the governing board and KMPs is also listed among the tasks that will be assigned to the committee.

About SEBI:

• The Securities and Exchange Board of India (SEBI) is the regulatory body for securities and commodity market in Indiaunder the ownership of Ministry of Finance , Government of India
• It was established on 12 April 1988 and given Statutory Powers on 30 January 1992 through the SEBI Act, 1992
• Headquarters – Mumbai
• Chairman – Madhabi Puri Buch ( recently appointed)

 Functions of SEBI:

The main primary three functions are-

• Protective Function
• Regulatory Function
• Development Function

1. Protective Functions

As the name suggests, these functions are performed by SEBI to protect the interest of investors and other financial participants.

It includes-

• Checking price rigging
• Prevent insider trading
• Promote fair practices
• Create awareness among investors
• Prohibit fraudulent and unfair trade practices

2. Regulatory Functions

These functions are basically performed to keep a check on the functioning of the business in the financial markets.

These functions include-

• Designing guidelines and code of conduct for the proper functioning of financial intermediaries and corporate.
• Regulation of takeover of companies
• Conducting inquiries and audit of exchanges
• Registration of brokers, sub-brokers, merchant bankers etc.
• Levying of fees
• Performing and exercising powers
• Register and regulate credit rating agency

3. Development Functions

This regulatory authority performs certain development functions also that include but they are not limited to-

• Imparting training to intermediaries
• Promotion of fair trading and reduction of malpractices
• Carry out research work
• Encouraging self-regulating organizations
• Buy-sell mutual funds directly from AMC through a broker

Objectives of SEBI:

• The objectives of the Stock Exchange Board of India are:

1. Protection to the investors

The primary objective of SEBI is to protect the interest of people in the stock market and provide a healthy environment for them.

2. Prevention of malpractices

This was the reason why SEBI was formed. Among the main objectives, preventing malpractices is one of them.

3. Fair and proper functioning

SEBI is responsible for the orderly functioning of the capital markets and keeps a close check over the activities of the financial intermediaries such as brokers, sub-brokers, etc.