Need balance between regulation and ease of doing business: SEBI's Tuhin Kanta Pandey

Need balance between regulation and ease of doing business: SEBI's Tuhin Kanta Pandey

Governance failures in large corporates can have ripple effects across the market economy, SEBI chairman Tuhin Kanta Pandey noted. He was speaking at the CII Corporate Governance Summit in Mumbai on April 17. Preventing such failures, he noted, is essential to maintaining financial stability. "By mandating disclosures, board structures and oversight mechanisms, we aim to create a self-regulating environment that encourages ethical and responsible corporate behaviour," Pandey added.

Speaking about the importance of corporate governance, Pandey added that SEBI has been instrumental in strengthening the corporate governance in listed companies. He explained that to ensure transparency and information symmetry in the market, SEBI has specified periodic disclosures of certain information such as quarterly disclosure of shareholding pattern, compliance with corporate governance requirements, financial results and deviation and neutralisation of funds.

In order to succeed, the SEBI chief noted that there is a need for a collaborative ecosystem. "There needs to be a balance between regulation and ease of doing business. We are conscious that over-regulation can stifle growth and innovation. At the same time, too little regulations can also lead to decline in trust of stakeholders and adversely impact growth. Thus, there is a need for optimum regulation. Regulations need to be rationalised by removing what is no longer relevant and reducing overlaps," he said.

Going ahead, he said that SEBI will continue to expect higher bar on governance. But true and lasting change, Pandey said, must come from within the corporate boardrooms, adding that there is a need for industry to adopt reg-tech solutions. "That can help in improving compliance, reporting, streamlining processes and improving the operational efficiency. SEBI and first-line regulators, which is exchanges, are deploying suit-tech solutions for effective and enhanced supervision. The use of technology by regulators has been very helpful in detecting early signs of market abuse and non-compliances," he said, adding that harnessing technological advancements could further reduce the potential blind spots, market misconduct and instill a culture of continuous compliance amongst regulated entities.

"Governance is not about ticking boxes. It is about building institutions that can be trusted for years and decades," he added.