Sebi to strengthen norms to prevent suspicious trades

India's market regulator plans to strengthen its norms to prevent suspicious trade activities typically associated with front running, insider trading and share price manipulation, according a consultation paper issued on Friday.

The Securities and Exchange Board of India (Sebi) has said that it will start investigations based on unusual trading patterns. Those involved in such trades would be required to give adequate explanation to prevent a regulatory fine or order.

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A repetitive pattern of trading activity by a person or a group of connected persons will be considered as an unusual trading pattern, Sebi said in the paper.

Sebi will also initiate a probe if an unusual trading pattern coincides with disclosures of price-sensitive information.

The regulator, in a first, has included stock recommendation by a financial influencer as price-sensitive information.