ANNUAL REPORT 2017-18 This Report is in conformity with the format as per the Securities and Exchange Board of India (Annual Report) Rules, 1994, notified in Official Gazette on April 7, 1994 MEMBERS OF THE BOARD (As on March 31, 2018) Appointed under Section 4(1)(a) of the SEBI Act, 1992 (15 of 1992) AJAY TYAGI CHAIRMAN Appointed under Section 4(1)(d) of the SEBI Act, 1992 (15 of 1992) G. MAHALINGAM WHOLE TIME MEMBER MADHABI PURI BUCH WHOLE TIME MEMBER ARUN P. SATHE PART TIME MEMBER Nominated under Section 4(1)(b) of the SEBI Act, 1992 (15 of 1992) SUBHASH CHANDRA GARG Secretary, Ministry of Finance, Department of Economic Aairs, Government of India INJETI SRINIVAS Secretary, Ministry of Corporate Aairs, Government of India Nominated under Section 4(1)(c) of the SEBI Act, 1992 (15 of 1992) N. S. VISHWANATHAN Deputy Governor, Reserve Bank of India MEMBERS OF THE BOARD AJAY TYAGI Chairman G. MAHALINGAM MADHABI PURI BUCH ARUN P. SATHE Whole Time Member Whole Time Member Part Time Member SUBHASH CHANDRA GARG INJETI SRINIVAS N. S. VISHWANATHAN Secretary, Ministry of Finance, Secretary, Ministry of Corporate Deputy Governor, Department of Economic Aairs, Aairs, Government of India Reserve Bank of India Government of India Chairman, Whole Time Members and Executive Directors (Left to Right) Sitting: Shri G. Mahalingam, Whole Time Member; Shri Ajay Tyagi, Chairman; Ms. Madhabi Puri Buch, Whole Time Member Standing: Shri S. Ravindran, Executive Director; Shri Nagendraa Parakh, Executive Director; Shri Ananta Barua, Executive Director; Shri S K Mohanty, Executive Director; Shri SVMD Rao, Executive Director; Shri Sujit Prasad, Executive Director; Shri P. K. Nagpal, Executive Director; Shri Amarjeet Singh, Executive Director; Shri Anand Rajeshwar Baiwar, Executive Director EXECUTIVE DIRECTORS (As on March 31, 2018) P K NAGPAL Oce of International Aairs, Human Resources Depart- ment, Internal Inspection Department, Ocial Language Division, RTI Cell, PQ Cell, Board Cell and Chief Vigilance Ocer ANANTA BARUA Legal Aairs Department, Enforcement Department, En- quiry & Adjudication Department and Special Enforce- ment Cell S RAVINDRAN Integrated Surveillance Department - 1 & 2 and Informa- tion Technology Department SVMD RAO Investment Management Department and Collective In- vestment Schemes SANTOSH KUMAR MOHANTY Commodity Derivatives Market Regulation Department, Department of Debt and Hybrid Securities and Facilities Management Division, Establishment Division, Treasury & Accounts Division and Protocol & Security in the Gen- eral Services Department NAGENDRAA PARAKH Market Intermediaries Regulation and Supervision De- partment, Oce of Investor Assistance and Education and Regional and Local Oces AMARJEET SINGH Corporation Finance Department, Department of Eco- nomic & Policy Analysis and National Institute of Secu- rities Market SUJIT PRASAD Executive Assistant to Chairman and Market Regulation Department ANAND RAJESHWAR BAIWAR Investigation Department, Foreign Portfolio Investment & Custodians and Recovery Divisions CHIEF GENERAL MANAGERS (As on March 31, 2018) PARMOD KUMAR BINDLISH Commodity Derivatives Market Regulation Department G GARG P Registrar, NISM A RAJAN Information Technology Department SURESH B MENON Enquiry and Adjudication Department SURESH GUPTA Enquiry and Adjudication Department V S SUNDARESAN Investigation Department and Special Enforcement Cell AMIT PRADHAN Enforcement Department - 1 N HARIHARAN Communication Division, Oce of Investor Assistance and Education and Board Cell PIYOOSH GUPTA Investment Management Department G BABITA RAYUDU Legal Aairs Department A SUNIL KUMAR Integrated Surveillance Department - 1 JAYANTA JASH Corporation Finance Department PARAG BASU Market Intermediaries Regulation and Supervision De- partment BARNALI MUKHERJEE Department of Debt and Hybrid Securities MANOJ KUMAR Market Regulation Department SUNIL JAYWANT KADAM Regional Director - Northern Regional Oce SANTOSH KUMAR SHUKLA Enquiry and Adjudication Department PRABHAKAR REDDY PATIL Integrated Surveillance Department - 2 and Department of Economic and Policy Analysis - 2 SARAT KUMAR MALIK Department of Economic and Policy Analysis - 1 SATYA RANJAN PRASAD On Deputation to PFRDA B RAJENDRAN Regional Director - Southern Regional Oce JEEVAN SONPAROTE CPIO, RTI Cell, PQ Cell and Enquiry and Adjudication De- partment RUCHI CHOJER Human Resources Department and Internal Inspection Department PRAVEEN TRIVEDI Enforcement Department - 2 BIJU S Enquiry and Adjudication Department Annual Report Team Dr Prabhakar Reddy Patil Chief General Manager Mr Laltu Pore Assistant General Manager Mr Tathagata Biswas Assistant General Manager Mr Prasad Patankar Manager Ms Akriti Manager Mr Sumit Kumar Verma Assistant Manager Ms Josephine Fernandes Secretary CHAIRMAN’S STATEMENT The world economy has witnessed faster recovery during the year has been aimed towards improving during 2017-18. A positive investment climate sup- corporate governance, standardising the procedures ported by robust macroeconomic performance, easing followed in the primary market, reviewing the risk inflationary pressures, stable FDI inflows, regulatory management framework, strengthening the deposi- and structural reforms by the government improved tory system, developing the mutual funds industry, the business confidence and attracted investors to the integration of the commodities and securities markets Indian capital market. Indian stock market scaled and strengthening supervision of the intermediaries. new peaks on the back of positive domestic and glob- Besides, enhancement of cyber security has been one al sentiments. The broad-based benchmark indices of the priorities during the year. S&P BSE Sensex and Nifty 50 continued its growth New policy measures for investors’ grievances re- momentum in 2017-18, as they gained 11.3 per cent dressal mechanism to achieve expeditious redressal and 10.2 per cent respectively against their closing at by prescribing norms for lodging and handling of the the end of 2016-17. As per the annual data for 2017 investor grievances have resulted in steep decline in published by World Federation of Stock Exchanges pending complaints. Options were launched in com- (WFE), NSE is placed at first position in the World in modity derivatives markets besides allowing partici- index options and at second position in stock futures, pation of Category III AIFs for the development of the when ranked in terms of the number of contracts trad- market. Further, SEBI expanded the list of securities ed. available for trading on stock exchanges at IFSC to Mutual funds industry witnessed substantial growth enable market participants to trade in a wider set of during 2017-18. Backed by strong inflows and in- products. creased participation of retail investors, the AUM of The assessment of the Indian Financial System was MF industry increased to ` 21.36 lakh crore at the end undertaken by the joint IMF-World Bank team during of March 2018 from ` 17.54 lakh crore at the end of 2017-18. The report acknowledges that SEBI had March 2017. The rising global equity markets and significantly expanded its regulatory programmes, accommodative global liquidity conditions coupled stretched its on-site inspection programme, devel- with positive business sentiment in India attracted oped a risk based matrix and had undertaken mea- foreign portfolio investors (FPIs) with inflows to the sures to quicken the pace of bond market develop- tune of US$ 22.6 billion. ment. During 2017-18, SEBI continued to pursue its mandat- SEBI is committed to work towards bringing greater ed statutory objectives: protecting the interests of in- transparency, better risk management for issuers and vestors in the securities market, promoting the devel- investors and more efficient capital raising. Going opment of and regulating the securities market. The forward, SEBI will continue its on-going process of main thrust of various policy measures undertaken reforms in the primary market to improve issuer and investor confidence. To improve the corporate gov- market, SEBI is also committed to its objective of pro- ernance framework, recommendations by the com- moting awareness about financial markets, making mittee set up under the Chairmanship of Shri Uday investors aware of financial planning and their rights Kotak, will be taken up for implementation. SEBI also and obligations regarding investments. intends to review its regulations in the context of the Incidents of cyber security breaches pose a major chal- corporate insolvency resolution process under the In- lenge to market participants across the globe. To deal solvency and Bankruptcy code 2016. with this challenge, SEBI will explore the scope for the Integration of commodities and securities derivative cyber security initiatives and also look into the oper- markets is being actively planned for further stream- ational modalities of implementation. Additionally, lining and development of the secondary market. aspects relating to data privacy requirements will be In this direction, there are plans to consider more examined and necessary eco-system for encouraging commodity options contracts to be launched besides applications of new technologies in capital market working on guidelines for index products. SEBI in- would be facilitated. SEBI would also endeavor to de- tends to strengthen the algorithmic trading frame- ploy data analytics and new generation technologies work to make the market more fair, equitable and to understand and handle various challenges