SEBI Builds New Surveillance System to Delist Bad Companies
By Market Desk
SEBI is developing a second surveillance system to identify and delist problematic companies and scrutinize small IPOs, protecting retail investors.
The Securities and Exchange Board of India is developing a secondary surveillance framework designed to identify and eventually delist problematic entities from the market. SEBI Whole-Time Member Kamlesh Varshney announced that the blueprint for this new mechanism is nearly finished during a function held by the Council of Professional Investment Advisers.
How the New Surveillance Framework Works
While the regulator already operates a live data system to catch market manipulators, this upcoming tool targets fundamentally problematic listed firms. The initiative addresses growing concerns around market integrity as retail participation expands across the country.
Key focus areas of the regulatory push include:
• Tracking existing listed companies for bad elements and potential delisting.
• Scrutinizing small initial public offerings that may be unsuitable for the capital market.
• Preventing financial losses and potential fraud for retail investors entering the ecosystem.
• Promoting Project Jagrook to enhance investor awareness and outreach.
Varshney emphasized that while SEBI remains committed to expanding the number of listed companies, growth must be matched by high standards of corporate governance. Data shows that only 9.5% of Indian households currently invest in the securities market despite widespread awareness. To safeguard these participants, stricter verification mechanisms are being implemented alongside educational initiatives.