The meeting assumes significance in the wake of heavy selling on the bourses by foreign institutional investors (FIIs) following reports of erosion of Unit Trust of India's (UTI) reserves.

The Sebi is expected to ask stock exchanges to monitor trading activities more closely and may stress on the need to put in place the `Stock watch' system, Sebi sources said. `Stock watch' system involves an automatic system which would alert fall in share prices beyond a certain level.

The system, for instance, gives a redlight for fall in share prices beyond 10 per cent, or say yellow if the fall is above five per cent. The system works in the reverse too. Putting in place the `Stock watch system' would give stock exchange officials a proper handle to check manipulation of prices, sources said.

Reportedly,following last Monday's fall in share prices, Sebi had also asked for details of trades from various stock exchanges. Sebi sources said top officials from leading bourses in the country namely, National Stock Exchange, Bombay Stock Exchange and Delhi and Calcutta are expected to attend Wednesday's meeting. On the details sought from stock exchanges on last Monday's trades, Sebi sources said it was just "routine in nature".

Stock markets took a heavy beating during the first two days of last week following announcement by the country's largest fund manager UTI that its reserves went negative. Reports have indicated that some FIIs sold heavily to bring down the share prices sharply.

Repeated assurances by UTI chief P S Subramanyam that the flagship "US-64" scheme was not facing redemption pressure and that UTI only proposed to widen its portfolio in terms of investing in debt instruments and would not reduce its equity exposure drastically, failed to enthuse market sentiments.

However, the mood changedonly after Finance Minister Yashwant Sinha announced in Washington during the IMF-World Bank annual meeting that government would never allow UTI to fail.