Market
Abuse is a broad term which includes abnormal price/volume
movement, artificial transactions, false or misleading
impressions, insider trading, etc. In order to detect
aberrant behavior/ movement, it is necessary to know
the normal market behavior -
The
department carries out investigation, if necessary,
based on the preliminary examination/analysis and suitable
actions are taken against members involved based on
the investigation.
All
the instruments traded in the market come under the
Surveillance umbrella of DSE.
Surveillance activities at the Exchange are divided
broadly into two major segments -
Position Monitoring
The
Surveillance Department closely monitors outstanding
exposure of members on a daily basis. For this purpose,
it observes various off-line and on-line market monitoring
reports. The reports are scrutinized to ascertain whether
there is excessive purchase or sale position build up
compared to the normal business of the member, whether
there are concentrated purchases or sales, whether the
purchases have been made by inactive or financially
weak members and even the quality of scrips is considered
to assess the quality of exposure.
The
following key areas are examined to assess the market
risk involved -
Online
monitoring of Brokers Position
Surveillance closely monitors brokers gross turnover
exposure for ensuring margin calls in time.
B/S
Statement of Trading Members
Scrutinizing
the statement on daily basis. It is for keeping a watch
on the exposure of the members & ascertain the quality
of exposures.
A
detailed report on the net outstanding positions of
top purchasers and top sellers in individual scrips,
is prepared, if considered necessary.
Concentrated
B/S
It
is considered a risky issue. In case, such a situation
is noticed, fundamentals of the scrips, their daily
turnover, their nature of transactions are ascertained.
Thereafter, based on the market risk perception appropriate
surveillance actions are taken.
B/S
of scrips having thin trading
It
is closely scrutinized as comparatively high market
risk is involved in trading in such scrips. Details
of trades in such scrips, if necessary, are called from
members to assess the market risk involved & decide
on the appropriate surveillance action.
Verification
of Institutional Trade
The
institutional trades executed by the trading members
are verified to ascertain the genuineness of trades.
Verification
of Foreign Trade
The
foreign trades executed by the trading members are verified
to ascertain the genuineness of trades.
Verification
of Cross Reporting Trade
The
report crossing trades executed by the trading members
are verified to ascertain the genuineness of trades.
Verification
of Dealers own trades
Trades
executed by the trading members (Dealers) are verified
to ascertain the genuineness of trades.
Verification
of Sponsor's Trade
The
Sponsors trades executed by the trading members are
verified to ascertain the genuineness of trades.
Snap
Investigation
To
carry out, wherever considered necessary, preliminary
investigation of certain dealings to verify irregularities.
Further actions, viz., referring the case for detailed
investigation, referring the case to the Sec, depending
on the findings of preliminary investigation.
Market
Intelligence
The
rumors floating in the market are verified with the
data available with DSE,Newspapers, Television news
channels & Reuters to ascertain the national &
global factors affecting the market sentiments. This
enables the Exchange to avert market problems before
it causes a serious damage.
Review
Block Trades
To
determine -
Verify
Company Accounts
To
scrutinize company announcements, company reports, auditors
qualifications & other notes of special interests
in the published accounts of such company.
Review
Media Information
To
scrutinize press articles or other media on the daily
basis, the news relevant to the share prices of companies.
Monitoring
on Newly Listed Stock
To
review all activities of a newly listed stock for the
first 1 / 2 weeks to identify any abnormal deal.
Develop
Good Liaison
To
develop & maintain good liaison with staff members
of SEC & listed companies & member firms as
well.
Develop
market contacts & to pick up Intelligence.
