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Jan 10, 2013, 08.53 AM IST | Source: CNBC-TV18

Sebi chief warns stricter action for cos mending rules

The market regulator is bristling with indignation. Especially, after insinuations of indiscipline and influence mongering at Sebi, report Sajeet Manghat and Sandeep Srikanth of CNBC-TV18.

Sajeet Manghat

Chief of Bureau, CNBC-TV18

The market regulator is bristling with indignation. Especially, after insinuations of indiscipline and influence mongering at Sebi, report Sajeet Manghat and Sandeep Srikanth of CNBC-TV18.

UK Sinha has clearly been rubbed the wrong way and his indignant mood has less to do with issues over investor protection or capital market expansion, and more to do with aspersions cast on the way Sebi functions.

UK Sinha, chairman, Sebi, says that there was a complaint that if you are very powerful you can get away with any offence and you can pay a certain amount to Sebi without admitting guilt and you will be out of it. We have given a discipline to ourselves that certain measures are now not fit for consent.

And this is not just lip-service. Sebi has released a list of entities whose consent applications have been rejected following new guidelines issued in May 2012.  Sinha adds that Sebi is also in a much better position now to conduct surveillance, and if required, take action against any entity.

“If there is any attempt on the part of anybody to manipulate the markets or to bypass the rules we are today in a much better position to do that and I want you to know that we are much sincere about it,” says Sinha.

This crackdown is just one aspect. Sinha says his primary concern remains the safety of retail investors -- especially those entering the capital markets through public issues. And while the board of Sebi is yet to take a formal call on a full-fledged safety net, measures are definitely on their way.

"Our discussion paper is in public domain, my own personal sense is that we must introduce a safety net mechanism may be in a milder form primarily to give a signal not about returning the money to give a signal that the pricing has to be right," says Sinha.

Clearly, the Sebi chairman is on overdrive. The first week of 2013 has already seen Sebi release discussion papers on buybacks through the open market, and the re-aligning of corporate governance to the new Companies Bill and with the board set to take up a review of the OFS guidelines and penalties for non-compliance with minimum float requirements later this month, investors have a lot to look forward to.

READ MORE ON  sebi, uk, sinha, companies, rules

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