Sebi plans to work towards a "stricter and prompter enforcement" regime using the latest technology and strengthen insider trading norms as it seeks to create an atmosphere of trust in the capital markets.
The Securities and Exchange Board of India (Sebi) has also decided to take steps to attract more retail investors to the markets as "more of domestic savings have been channelised into physical assets of late and financial savings have undergone a marked decline."
"The way forward for securities market is to create an atmosphere of trust in the market, confidence in the investor and efficiency in the system," the regulator said in its latest annual report to the government.
"We need, therefore, to work towards stricter and prompter enforcement, spreading financial education and upgrading technology," the regulator said.
Noting that higher individual investor participation would be a precedent to the development of markets, Sebi said it would continue to take measures to shore up the retail presence in the capital markets.
Sebi has already introduced anchor investors in initial public offerings (IPOs) and prohibited non-retail investors from withdrawing or lowering bid sizes as part of steps to attract individuals investors.
It said insider trading regulations would be updated to bring them in line with global best practices.
"The extant regulatory regime on insider trading would be reviewed and realigned with the best practices adopted globally under the supervision of a high-level committee," Sebi noted.
It said amendments to insider trading regulations to fortify the framework that protects a fair marketplace is also in progress.
Besides, Sebi has set up a 16-member committee to suggest new rules on insider trading, which would replace the almost two-decade old set of norms.
The committee will examine practices followed in other parts of the world and would submit its recommendations on insider trading by next year.
"It is also crucial to promote fair practices that align with the best in class through stronger enforcement measures and in harmony with the technological developments worldwide," Sebi said.
While some segments of the market may require constantly evolving vigil due to their pervading effects, all grey areas would require immediate intervention, Sebi said, adding that investor education would remain a priority area.