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Staff crisis threatens SEBI mkt surveillance

business Updated: Dec 17, 2007 00:00 IST

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The Securities and Exchange Board of India (SEBI) faces shortage of trained staff to conduct effective surveillance, investigation and enforcement for a market that has grown by leaps and bounds in the last five years, a US Agency for International Development (USAID) report titled “Deepening the Indian Capital Market: The Way Forward”, has said.

“SEBI lacks the required level of trained staff to conduct effective surveillance, investigation and enforcement... More staff and significant additional training are required," the USAID report said.

SEBI's regulatory task force has not grown despite significant growth of the market and intermediaries in the last five years. Till March 31, 2006, the capital market regulator had 441 employees in various grades, including 288 officers. The watchdog is frequently confronted with situations where it recruits, trains and provides experience to staff that leave for higher paying jobs. Besides staff constraints, SEBI also lacks immediate access to specific information on market intermediaries, the report noted. It does not have a centralised information database for several thousands of market intermediaries that can boost surveillance capacity of the regulator at a time when it is facing shortage of trained staff, the report said, emphasising that the regulator needed a centralised database on the lines of the US Central Registration Department (CRD).

The CRD maintains comprehensive data on all intermediaries, including information on background, identity, education, employment, certifications and conduct.

However, in India the information about intermediaries is scattered and inaccessible. Registration information filed by intermediaries related to their job, residence and conduct histories, is recorded in various systems, including on paper, in several places, either at individual exchanges or in SEBI, the report said.

Meanwhile, SEBI has delegated the National Institute of Securities Market with the additional responsibility of maintaining records of each intermediaries' qualifications and education requirements.

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