New Delhi: Market regulator SEBI has not come across any instance where merchant bankers intentionally do not reply to queries related to initial public offerings (IPOs), Parliament was informed Wednesday.
To a query whether there is a tendency of the merchant bankers of IPOs to intentionally not reply to SEBI's queries related to their IPO, Minister of State for Finance Namo Narain Meena in Lok Sabha said, "No".
"SEBI has not come across any such instances of merchant bankers intentionally not replying to the queries related to IPOs," he said.
He added that "to check volatility in the price of an IPO on its listing day, SEBI put in place a pre-open call auction mechanism...And also a framework of trade controls applicable to the normal trading session of the IPO scrips.
In another reply, Meena said SEBI has put in place appropriate system for monitoring algorithmic trading in the stock market.
The rules have been formulated for the use of sophisticated automated software to prevent systemic risks caused by algorithmic trading used by brokers.
Algorithmic trading refers to orders on bourses that are generated using high-frequency, automated execution logic.
Meena informed Lok Sabha that SEBI in its interim order dated on August 3 barred 19 entities from the securities market after an initial probe into the recent share price plunge in some mid-cap stocks, including Parsvnath, Tulip Telecom and Pipavav Defence.
The entities restrained from accessing the securities market and prohibited from buying, selling or dealing in securities in any manner whatsoever, till further directions.
The probe relates to a sharp plunge of 20-26 percent in the shares of Parsvnath Developers, Pipavav Defence and Offshore Engineering, Tulip Telecom and Glodyne Technoserve on July 26 at the BSE and NSE.
In the preliminary analysis, it was found that group of related entities were found to be trading substantially in these mid-cap stocks and their income details captured in Know Your Clients (KYC) records were found to be commensurate with their trading pattern, Meena said.