Rajan's exit: Sebi, exchanges beef up surveillance

June 20, 2016 08:12

Regulator Sebi and stock exchanges have beefed up their surveillance and risk management mechanism to ring-fence capital markets from any excessive volatility today on account of RBI Governor Raghuram Rajan's surprise decision against a second term.

Banks and forex dealers are also gearing up to meet any excessive money demand, especially for dollar, on concerns that Rajan's eventual exit this September could trigger capital outflows amid jitters among foreign investors.

Maintaining that the Indian capital markets have a robust risk management and surveillance mechanism in place, senior officials said they have beefed up the systems to check any adverse eventuality.

The regulator and the bourses would also keep a strict vigil for manipulators looking to exploit the volatile trends expected in stocks and derivatives, including those linked to rupee's movement against other foreign currencies, they added.

Besides, brokers, portfolio managers and other market intermediaries would be under a close watch for any attempts to lure small retail investors into promises of hefty gains from the futures and options trading, especially in banking stocks and indices.

According to officials, the financial market regulators, including RBI itself, were already bracing up for volatile trends ahead of the Brexit referendum this week, but Rajan's sudden announcement over the weekend has added to the worry.

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