As part of the ongoing market reforms, SEBI chairman M Damodaran also announced plans to allow short selling shares by institutional investors by this year-end.

Speaking at the 'Hindustan Times Leadership Summit', he said SEBI was working towards launching more products, faster processes and lowering costs to make equity investment attractive in India.

"Though our mandate is to develop the market, we will not lower the regulatory standards," he said, adding that the regulations are intended to "separate the grain from the chaff" and at the same time drive growth in the market.

Though there has been a rise in compliance among listed companies, Damodaran admitted, "There are problem companies that are listed in the bourses that needs to be dealt with."

"We tend to look out for manipulative behaviour. If there is a manipulative intent, we look at that," he said.

Asked whether SEBI was looking into dubious money flowing through Participatory Notes of FIIs, Damodaran said, "Every regulator is comfortable in knowing who is that entity that is active in that market."

To ensure orderly conduct in the market, he said an integrated market surveillance system would be put in place by March 2006 along with a slew of regulations.

"We are also trying to come up with new norms for follow-on public offers by this year," he said, adding that the intention was to reduce the time and cost of the offers.