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Mkt misconduct identifies Sebi Act limitations: Govt

Concerned over sharp fall in market capitalisation of 50 leading company shares, the government said on Tuesday that episodes of market misconduct in recent years had identified limitations in the Sebi Act and that it was strengthening regulatory mechanism by providing more powers to the market regulator.

"There were declines in the capital raised from the primary market as well as net resources raised by mutual funds during the first half of the year," the mid-term economic review, presented in Parliament by Finance Minister Jaswant Singh, said.

"The capital market remained subdued during the first half of the current year and country's leading bourse index - NSE-50, which captures the behaviour of the top 50 liquid stocks, makes up roughly half of the market capitalisation of the country, dropped 15.4 per cent", he said.

Nifty moved from 1138.1 on April 2, last year to 1138.95 on April 1, 2002 and dropped to 963.15 on September 30, he added.

The minister said in recent years, episodes of market misconduct identified limitations in the legal provisions of Sebi Act and an ordinance was promulgated to strengthen it way back on October 28.

Apart from the organisational strengthening, Sebi had been given more powers for investigation, levying larger penalties and providing sharper definitions of concepts such as insider trading and market manipulations, he said.

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