Enforcement not the only solution to violations, says Sebi’s Kamlesh Varshney

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₹7.41 crore in fines for allegedly making “unlawful gains" by taking the opposite positions in the market from the ones they promoted on air. Varshney said, “If we see that on a television channel, guest experts are giving advice to manipulate the market we will of course enter the picture, but it is the responsibility of the TV channel to see whether their guest experts are giving advice in a transparent manner or there is some manipulation going on.

They may not have enforcement power like us, they may not have surveillance mechanisms and tools like we have, but they can do a smell test." A smell test refers to a simple and informal evaluation of a situation or proposal. Varshney also cited front-running activities that the regulator has witnessed at some asset management companies.

He said, “We have seen a lot of front-running in mutual fund companies. Managers of these companies can definitely have control mechanisms in place to ensure that their employees are not doing any frontrunning or involved in any other manipulation schemes.

Now, these voluntary compliances are going to play a very important role in ensuring that investor trust is not affected." Varshney was referring to a series of allegations against former employees of Axis Mutual Fund, including front-running, receiving bribes from brokers, and placing trade orders at inflated prices. Addressing the same event, Ananth Narayan, another whole-time Sebi member, said the regulator has three fundamental mandates under the Sebi Act.

“We are charged with investor protection, market development, and market regulation. Essentially, if you put all three together, our collective goal is to ensure sustainable capital formation." Narayan added that market regulators