Having pendency is good but ageing of public issues is bad, says Madhabi Puri Buch

SEBI chairperson Madhabi Puri Buch

Having pendency is good because it means there's more activity in the market but ageing of public issues is bad, Securities and Exchange Baord of India (SEBI) chairperson Madhabi Puri Buch said on April 2.

“We have started tracking public issuance approvals quarter on quarter. Having pendency is actually a good thing because it means there's more activity in the market but ageing is a bad thing," Buch at the 17th Corporate Governance Summit in Mumbai.

She shared a colour-coded image which captured the times it took for public issues and mutual funds to get clearance.

"If something is in the green and yellow, we consider it good. The minute it goes into blue and grey, the teams are answerable as to why that is pending. What is it that is obstructing it? What are the policy interventions we have to take to eliminate that ageing?” said Buch.

As of February 29, for instance, there were 11 greens, 17 yellows, four blues and four greys for IPOs.

On new mutual-fund schemes, Buch said that earlier sales teams at MF houses used to tell the compliance teams to file the paperwork with SEBI immediately because the regulator would take three to four months to clear them. But now they ask the compliance not to file the papers just then because the regulator would approve it in three or four days and the sales team was not ready for launch.

SEBI is streamlining the use of technology and processes to make sure that whenever there is an opportunity to raise capital from the market, there is never any reason for any delay from the regulator’s end, she said.

Talking about T+1 settlement, the SEBI chairperson said that no large market in the world has achieved this milestone. “Prior to moving to T+1, the defect rate was about 0.7-0.8 percent. After implementation, it halved to 0.3-0.4 percent. The entire process was far more optimal and efficient after moving to T+1. And now we have moved into optional T+0,” she said.

Now the world turns to India for guidance, while earlier the country's representatives were seated in back rows at global events, she said.

“The number of awards that have been won by our market infrastructure institutions such as NSE, BSE, NSDL, and CDSL, whether it is for T+1, T+0 or distributed ledger technology is commendable. We have implemented one of the most sophisticated distributed ledger technologies for our bond market for which NSDL has been feted across the globe,” Buch said.