Among others, Sebi will study the systems put in place by its peer regulators in countries like the US, UK, Australia and Hong Kong for this purpose, a senior official said.
The proposed move is part of various policy issues under consideration of Sebi's Integrated Surveillance Department and aims to make its systems more effective.
Among others, the Department is also formulating a plan of action for tackling the menace of companies existing on paper only, while stringent actions are underway against those violating the Listing Agreement by making inadequate disclosure of price sensitive information.
Besides, the regulator is also considering possible action like freezing of promoter shares in a company found to be non-compliant to the Listing Agreement and other norms.
Concerned about gullible investors being defrauded by certain companies existing only on paper, the capital markets watchdog is planning to conduct surprise inspections of such entities to bring them to book.
The typical modus-operandi of such entities involves setting up of a company, followed by tall claims about their proposed business ventures. Then an exercise is undertaken to collect funds from investors, including through IPOs (Initial Public Offers) of shares and issuance of other securities.
The study on 'trend or pattern discovery module' would also include the best practices followed in developed markets for surveillance of algorithmic and high frequency trading, an area which has been a matter of concern not only for India but also for many others.
The study is one of the major policy initiatives proposed by capital markets regulator Sebi for the current financial year, for which Sebi has identified 'capacity building' as a core focus area.
According to the proposed move, a comprehensive study needs to be undertaken to understand the "trend/pattern discovery by regulators in developed markets like the US, UK, Australia and Hong Kong" in order to keep pace with the ever increasing globalisation of Indian markets.
"The study would include analysis of their surveillance infrastructure and techniques to decipher patterns in the trading, formation of associations between entities, gathering of market intelligence including linkage of price volume pattern to market information, etc," the official added.
With regard to Sebi's capacity building initiatives, an independent consultant has suggested that the regulator needs to undertake technical training, especially in areas like inspection and surveillance, on a much larger scale and the same would be pursued in the next fiscal more vigorously.