More powers for SEBI, Jignesh Shah chargesheet, RBI policy hog limelight …


The day was abuzz with developments that sure will put an impact on the market in the coming days. From Jignesh Shah’s charge sheet to RBI credit policy review and the monsoon progress.

Jignesh Shah, the central figure in the infamous NSEL scam has been charge sheeted by the Economic Offences Wing (EOW) of Mumbai Police today. It was the story of an exchange that went unregulated, a case which fits into the famous Warren Buffett quote ”A pin lies in wait for every bubble”

Shah has been in custody since 7 May in connection with the RS 5,574.35 cre fraud at the National Spot Exchange Ltd (NSEL). The crisis opened many grey areas in the commodity market,especially governance/ regulation over the exchanges.

Parallel with the Jignesh Shah story, is the securities market regulator Securities and Exchange Board of India (SEBI) poised to become the ‘Big Brother’ armed with more power in its arsenal . The Securities Laws (amendment) Bill, 2014 was tabled on parliament today. With this SEBI can issue orders to prevent individuals or companies from pursuing a particular activity and not resume it.

It will help SEBI recover dues from defaulters and conduct a search on any premises and seize documents relevant to any alleged capital markets default. The additional powers will also authorize Sebi to access call data records in insider trading investigations.

RBI’s credit policy review is due to be announced on Tuesday. Experts point out RBI is unlikely to cut key policy rates (repo rate, CRR). However, the stock market had its impact today with BSE Sensex closing 242 points or 0.95 per cent higher at 25,723.16. It hit a low of 25,531.38 and a high of 25,754.42 in trade today. The bank is focusing on its anti-inflation campaign.

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