With India’s advancements in the financial sector and its role as a pioneer in setting global standards, the nation is increasingly being looked upon for best practices in capital market regulation and innovation. “We rarely need to refer to global best practices because we have become the benchmark for global best practices, and more often than not, the world is reaching out to say we want to know how you did it,” said Madhabi Puri Buch, Chairperson, SEBI, addressing the 20th Annual Capital Markets Conference (CAPAM2023), organised by FICCI.
The chairperson highlighted significant progress and strategic initiatives SEBI undertook in line with India’s commitment to enhancing capital formation and regulatory efficiency. In her comprehensive speech, Buch emphasised SEBI’s fundamental role of capital formation in the economy and the need for efficient regulatory processes. Key reforms in processing applications swiftly and transparently were a highlight, demonstrating India’s commitment to minimising delays and eschewing ‘dogmas’. She quoted SEBI’s review of delisting regulations and trading plan reforms, by way of example, which are proposed to be presented to the SEBI Board shortly.
Covering the strides in balancing ease of doing business with trust and stakeholder protection, the SEBI chief called for building thrust in the system. “What is required is addressing the details so that there is ease of compliance,” Buch cited examples like the industry standards for implementing SEBI regulations, which reflects a collaborative approach between regulators and market participants. She alluded to the Industry Standards Forum becoming a formal part of the regulatory architecture. Buch highlighted SEBI’s initiatives in adopting a consultative approach towards regulation-making or amendments which are now becoming a norm for SEBI’s policy-making process, increasing from 7 per cent between 2003 -2013 to 17 per cent over the next nine years and to 33 per cent over the last year. This approach, she said, has led to significant reforms in various areas, including insider trading policies, delisting regulations, and ESG metrics. “The focus remains on ensuring that any new regulations are practical, implementable, and backed by comprehensive data,” Buch noted. Discussions in various sessions of the conference highlighted how vibrant capital markets are also becoming necessary for industry to provide capital which is the fuel for economic growth and India’s journey to being a USD 5 trillion economy along with climate change mitigation will require significant investments, “Digital infrastructure, increased awareness, and simplified KYC norms have democratised access to capital markets, taking it beyond Tier 1 cities and financialising household savings,” noted Subhrakant Panda, President, FICCI, ruling out hostility between a regulator and market participants. Anish Shah, President-Elect, FICCI and MD & CEO, Mahindra & Mahindra underlined high standards of governance, vibrant capital markets and efficiency as critical while Ashish Kumar Chauhan, MD & CEO, NSE, agreed that stock markets have functions to help promote capital formation, job creation and wealth creation in the country in a highly regulated way. Currently, more than 8.2 crore unique investors are directly registered with NSE, accounting for 17 per cent of India’s population.”