Over 30 entities under SEBI lens for unusual trading on May 16

New Delhi: More than 30 entities, including brokers and high net worth individuals, have come under the scanner of market watchdog SEBI for unusual trading activities  on the day of Lok Sabha election results. The trading activities of these entities came to the notice of the regulator on May 16, the day results of the Lok Sabha elections were declared.  To prevent possible manipulations and excessive volatility in stock trading in the wake of election results,  the Securities and Exchange Board of India (SEBI) had made  elaborate mechanism to keep a close tab on the market.  Sources said that more than 30 entities have come under the scanner after SEBI noticed unusual trading volumes  pertaining to them on May 16. 

A preliminary enquiry has been initiated to as certain whether these entities, that includes brokers and high net worth individuals, indulged in suspicious transactions, they added.  The market regulator is gathering information about such transactions from its Integrated Market Surveillance System (IMSS). Besides, data is being collated from the exchanges and clearing corporations, among others, sources said. A special team at SEBI kept a close tab on the stock market movements, while another team monitored the election  results as they were announced to understand whether price  movements are linked to outcomes in various constituencies.

SEBI would also be closely watching market movements on Monday to avert any possible shocks.  Earlier sources had said that trends in overseas markets and factors affecting foreign institutional investors were also being monitored continuously.  In the run up to poll results, stock market had touched record highs amid expectations of a stable government coming into power at the Centre. The rally had gained momentum when exit polls pointed towards BJP-led NDA victory at the  hustings. On May 16, the 30-share bluechip index, which had gained  over 1,560 points in five sessions previously, had surged  1,470 points to hit a new life-time high of 25,375.63 in early  trade fuelled by hopes that BJP government would fast-track  reforms and accelerate economic activity.  The Sensex ended the day at a new closing peak of  24,121.74 points.  Prior to declaration of election outcome, on May 13, the  government had asked regulators, including SEBI and RBI, to  remain alert and take actions to curb excessive volatility.

U K Sinha, SEBI Chairman  had said that regulations are in place to curb any excessive volatility and the regulator in  keeping a very close watch on stock movements.  "There is no need for anybody to worry. If we find that anybody is doing anything wrong, is in violation of any of  Sebi's regulation, we will take prompt action," concluded Sinha.