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SEBI probe into four volatile scrips to be over in September

The Securities and Exchange Board of India inquiry into the 'undue volatility' in four scrips at the Bombay Stock Exchange last month is expected to be completed in six to eight weeks.

Finance Minister Yashwant Sinha told R Sambasiva Rao and Aman Kumar Nagra in the Lok Sabha during Question Hour on Friday that pending the inquiry, SEBI had taken several steps which include ''two additional margins of five to ten per cent on outstanding positions''.

He said there was also a provision for ''circuit breakers'' for automatic corrective steps whenever the scrips fall or rise too much. He also said the problem had not led to any payment crisis.

The minister said the steps taken on the recommendations of the Joint Parliamentary Committee after the securities scam in 1992 had helped to set up mechanisms which helped in taking quick action.

Sinha said steps were being taken to assure the small investor that proper safeguards had been built in to ensure that it was safe to invest in stocks.

In reply to the main question, Sinha said the scrips affected were those of BPL Limited, Videocon International Limited, Sterlite Industries Limited, and Pentafour Software Limited.

He said several factors influenced the prices in the stock market. These include expectations of investors regarding the performance of the corporate sector and the economy in general, perceptions of the investors about economic policies of the government, developments in the international capital market and speculative activity.

The government's principal consideration and SEBI which is the stock market regulator, is to ensure that the stock markets operate in an orderly and transparent manner in full compliance with SEBI's rules and regulations.

UNI