Market manipulators in India - Beware

"There is bad news for market manipulators in India. The Securities and Exchange Board of India (Sebi) is going live with its own market surveillance mechanism, called the Integrated Market Surveillance System (IMSS), from December 1.". Thus reads Financial Express.

It is high time to know what is this "Integrated Market Surveillance System (IMSS)". As per SEBI, it is "SEBI intends to setup a comprehensive "Integrated Market Surveillance System" (IMSS) for monitoring the market activities across various stock exchanges and market segments (including both equities and derivatives). In this regard SEBI invites "Expression of Interest" from leading vendors of International class and standing to provide an end-to-end solution for building the said project on a total turn key basis.

The primary objective of the project is to enable establishment of a robust and integrated market surveillance system to detect potential and accomplished insider trading and manipulation/fraud violations across financial instruments and markets.

SEBI desires to implement a comprehensive surveillance platform that will provide it with:

* An online data repository capable of capturing market transaction and reference data;

* A research and regulatory analysis platform (consisting of a combination of off-the-shelf and custom software), and

* Sophisticated alert engines that can work with various data formats (database, numeric and text data) that have the:

* Capability to detect insider trading – that is, illicit trading ahead of the public release of price sensitive information regardless of its source;
* Capability to detect potential fraud by misrepresentation, including violations such as making public announcements with the intent of moving the price of an instrument either up or down;
* Capability to detect fraudulent trading practices, including violations such as synchronization/wash sales; and
* Capability to detect potential and accomplished manipulations in the market, including violations such as market domination, marking the open, marking the close, and stock-option manipulation."
Source:SEBI