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Jaswant vows to curb insider trading

New Delhi, Dec. 1: Finance minister Jaswant Singh today said the government will make efforts to curb insider trading in capital markets.

Despite the limited resources available to the regulator, staff and the technological strengths of the Securities and Exchange Board of India (Sebi) will be augmented to keep pace with the expansion of its regulatory powers, Singh said responding to suggestions made by members of the parliamentary consultative committee, which met to discuss capital markets.

Speaking on the issue of corporate governance, he said the issue was limited not only to regulation but to a larger effort to put in place ethical practices.

Admitting that the volume of trade in the Indian capital market was still “thin”, Singh said, “There was a need to add substantial volume to the market.”

Supporting the need for quarterly disclosure of financial results, Singh said it was part of the global practice and was in the interest of the investors. The meeting was attended by former finance minister Manmohan Singh, Nawal Kishore Rai, Parmeshwar Kumar Agarwalla, Abani Roy, Ashwani Kumar and Santosh Bagrodia.

The meeting was held in the backdrop of news reports that Sebi has noticed that 31 entities, appearing to be overseas corporate bodies, may have breached regulations by heavily subscribing to participatory notes issued by some of the FIIs, in which they are not supposed to invest.

“After getting approval from their clients, these entities have started submitting information,” Sebi had written to the finance ministry. However, only four entities — Citigroup Global Markets (Mauritius), JP Morgan Chase, HSBC Financial Services and Goldman Sachs Investments — are known to have furnished details needed for the probe.

Of them, Goldman Sachs had issued participatory notes/warrants to CSFB, Switzerland, which is outstanding to the extent of Rs 579 crore as of September 2003.

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