The Securities and Exchange Board of India (Sebi) is not in overdrive to impose more regulations on the market but it has become more consultative, chairperson Madhabi Puri Buch said on November 16.
“This (the increased issuances of consultation papers) is coming from nothing but a deep-seated belief at Sebi that the market is today very complex and we would be doing the wrong thing if we don’t consult fully and understand everybody’s perspective before we make something into law,” Buch said at FICCI’s Capital Market Conference.
Also watch: Sebi's Madhabi Puri Buch speaks at FICCI's Capital Market Conference
Sebi chairperson said the regulator had received feedback that it was on a “hyperdrive” with a consultation paper being issued “every third day” and it was hard to keep track off them. In response to that, she shared data that showed that the issuances reflected a change in regulatory attitude but for the better.
Between 2003 and 2013, the percentage of consultation papers to the total circulars issued by Sebi was 7 percent, meaning that for every 100 circulars issued only seven were consultation papers. Over the next nine years, it went up to 17 percent.
This meant Sebi was consulting more because the regulator thought that markets had become more complex and it needed to consult participants more to ensure that it got it right, Buch said.
In the past year, the percentage has gone up to 33 percent —one of every three Sebi circulars is a consultation paper.
“So, it is not that we are imposing more regulations on the market, you are getting that feeling because Sebi is consulting more,” Buch said. “If you tell us, we will not consult,” she added in jest.
Buch said that consultation meant more work for Sebi because it gets dozens and sometimes hundreds of responses and they read and analyse them and also explain to the board the reasons for accepting or rejecting suggestions.
She said, smiling “Aap kehte hain toh ye 33 percent ko wapas 7 percent le ja sakte hain, aap bataye (If you say, we can take this 33 percent back to 7 percent, you tell us.)”
Buch said the regulator took its consultative approach “very, very seriously” and that is what was reflected in the 33 percent.
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