SEBI plans to remove inactive companies from stock exchanges, says chairman

KOLKATA: The securities and exchange board of India (SEBI) is taking steps to remove companies with no economic activity from stock exchanges, as their continued listing could expose investors to potential risks, chairman Tuhin Kanta Pandey said on Saturday.Chairman Pandey pointed out that several companies remain listed despite having no economic activity, making them vulnerable to misuse by market manipulators, according to the news agency PTI."They pose a potential danger to investors, and therefore, it is necessary to remove them from the listed space. We are making efforts towards their delisting," he said at a programme in Kolkata.He stressed that addressing the presence of such companies was important for maintaining market integrity. Their continued listing could put more investors at risk, particularly through social media groups used to promote questionable stocks.According to Pandey, some manipulators use these stocks for "pump and dump operations". SEBI is deploying artificial intelligence (AI) tools to identify and scrutinise suspicious accounts, alongside several other measures aimed at protecting retail investors from such schemes.Changes proposed for SME listing frameworkOn the small and medium enterprises (SME) listing platform, the SEBI chairman said the regulator had proposed a series of changes through a consultation paper to strengthen the existing framework. However, he acknowledged that some older companies on the platform continued to be a concern.SEBI to ease certain FPI normsOn foreign portfolio investors (FPIs), Pandey said SEBI would soon release another consultation paper proposing relaxations in certain regulatory requirements, particularly those concerning disclosures and concentration limits.The paper is expected to be issued in the coming weeks, rather than months, he said.Pandey noted that FPIs operate across international markets and assess investment opportunities based on post-tax returns in dollar terms. Their decisions are influenced by factors such as corporate earnings prospects, the emergence of new sectors, currency movements, US Federal Reserve interest rates and global bond yields.He added that SEBI was working to make the Indian market more accessible for FPIs by simplifying processes related to their onboarding as well as their continued operations in the country.You use AI every day. Now get your AI Quotient. Take the AIQ test.