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Sebi chief wants more teeth for regulator

Faced with a scathing criticism about its performance, Securities and Exchange Board of India chairman D R Mehta on Tuesday said inadequate powers had hampered the market regulator's investigations and surveillance work.

"SEBI is held responsible for bearish market conditions and also criticised for its alleged non-performance, but how do you expect us to perform in the absence of adequate powers", Mehta said at a seminar -- Mutual funds: Structural evaluation -- organised by the Federation of Indian Chamber of Commerce and Industry and the Association of Mutual Funds in India in Bombay on Tuesday.

"We are being criticised for not exercising powers which do not rest with us," he said.

"Indian companies should raise the quality of their disclosures and instead of accusing the regulator, should work towards improving their performance and gain investors' confidence," an agitated Mehta said.

Referring to the recent incidents, Mehta said that SEBI's orders against the entities violating certain (SEBI) norms, have been challenged in at atleast 15 different courts in the country. In most of the cases SEBI's orders are questioned, he informed.

He said that it has become a fashion to accuse SEBI for even the rise and fall in the market, which is totally uncalled for.

Mehta strongly advocated the need for adopting strong ethical standards by the industrialists and maintaining corporate governance to strengthen investors' confidence in the country.

Mehta urged the chambers of industries to evolve some strategy which will force the industries to attain corporate governance standards.

The multiplicity of regulatory agencies had adversely affected SEBI's functioning, he said adding that worldover there existed a trend to move towards one regulator for the securities industry.

"There is an overlap in the regulatory role of SEBI, the Reserve Bank of India and the Department of Company Affairs," the SEBI chief said.

Referring to the recent shift of industries towards private placement for raising money rather than the preferred route of primary market, Mehta cautioned that unless some stringent norms were made applicable for such practices, these private placements may create problems in the future.

Earlier, speaking on the occasion, Y H Malegam, managing partner, S B Billimoria and Company, stressed to fill in the gap of minimum requirement of capital to set up an asset management company and the assets raised by the mutual fund. According to him, it is necessary that these two things need to be linked with each other.

Agreeing on the suggestion made by Malegam, Mehta said, SEBI will positively consider this proposal.

UNI

(With additional inputs fron PTI)

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