Mumbai,Dec 29: The year 2002 ended on a sour note for Securities and Exchange Board of India (SEBI) with severe indictment by Joint Parliamentary Committee for its failure to forsee and handle the stock market scam, forcing the market regulator to take stock of the situation and line up strategy to improve working of the market. The entire functioning of the regulator, especially inspection, surveillance and investigations has come under a close scrutiny with the regulator itself having very few skilled and experienced professionals at its command.

The JPC, in its report has advised a "critical look" at the role of directors (atleast three posts lying vacant and fresh recruitment being carried out) for not ensuring compliance with various steps recommended in the inspection reports.
The JPC also pointed out SEBI's inability to act in time to lay down mechanism to prevent scams like the one in 2001 or "atleast activate red alerts that could lead to early detection, investigation and action against the frauds".
In an effort to improve functioning of markets, SEBI under the new chairman G N Bajpai who tookover from D R Mehta in February, has now been given teeth. It has now got into an active mode with a slew of measures to instill discipline and improve corporate governance practices. SEBI signed an information sharing pact with Financial Services Commission of Mauritius in December to dig deep into the securities scams like that of 2000-01 and prevent similar incidents in future. Bureau Report