In a communication to all the stock exchanges (SEs), the market regulator has asked them to furnish all the financial details about the errant companies. "The stock exchanges would determine which companies are not traded and are not submitting results. Based on this preliminary data, we would go ahead with the investigations," Sebi officials said here today.

"As per the SEBI Act, we do not have any control over companies including issuer companies after their issue process is over. Sebi is now planning to reduce the length of the issue process and tighten the monitoring of intermediaries associated with the capital market," he said. Strengthening of the self-regulatory organisation is with the stock exchanges and also on futureagenda of the Sebi, Ranjan said.

Sebi said that in order to strengthen the surveillance and enforcement, it is planning to set up stock-watch system in all stock exchanges by the end of current fiscal. This system would generate on-line alerts to detect and prevent market manipulations, abnormal trading by brokers, and insider trading. While the NSE has already begun trial runs of the system, the Bombay Stock Exchange (BSE) will install the stock watch system by January 31, 1999, said L K Singhvi, executive director of Sebi.

"There is a need to create surveillance and compliance culture among institutions and market participants," he said.

Singhvi said that despite pain-stacking investigations, the Sebi Act does not provide for any powers of attachment and no specific powers has been conferred on them to discourage ill-gotten profits. "Besides, Sebi even does not have the powers of search and seizure," Singhvi said.

"The maximum monetary penalty permissible is only Rs 5 lakh for multi-crore scams," hesaid. For example, in the multinational Hindustan Lever insider trading case, the Sebi was unable to levy a higher fine due to lacunae in the Act.

On mutual funds, SEBI executive director Ashok Kakkar said that they are planning to appoint an independent body for calculation of net asset value (NAVs) of mutual funds. "We have sent the proposal to the Association of Mutual Funds of India (AMFI) for objections and suggestions," he said.

Sebi officials concluded that there should be a consolidated securities law and provisions relating to the securities market should be deleted from the Companies Act and suitably incorporated in the Sebi Act.

Besides, there should be one authority which should investigate and regulate the securities market instead of multiple authorities like CBI, MRTP, CBI, RBI, and consumer forums, officials said.