The Hindu Business Line : SEBI chief defends frequent changes in listing agreement

THE Securities and Exchange Board of India's (SEBI) Chairman, Mr G.N. Bajpai, on Friday defended the frequent revisions in corporate governance norms through amendments in listing agreements. The regulator had a dual responsibility of "development and regulation" of the securities market, he said.

"A dynamic market requires frequent changes in corporate governance norms. You cannot expect the regulator to revise regulations only once in a year or so. I have a responsibility to protect investors' interests," Mr Bajpai told participants attending an international conference on `Investment friendly tax and corporate law regime', organised by the Federation of Indian Chambers of Commerce and Industry (FICCI).

A large section of Corporate India had expressed reservations over the recent amendments made to Clause 49 of the listing agreement. FICCI has been pleading for the withdrawal of these amendments. "In your zeal to get good corporate governance, a plethora of regulations are being framed. This would only result in compliance in form and not in substance," a senior FICCI official said.

It was also pointed out that SEBI was taking recourse to subordinate legislations to make frequent regulatory changes. Some professionals even said that the Department of Company Affairs should alone monitor and regulate the corporate governance practices.

Mr Bajpai defended the use of listing agreements to bring about changes in corporate governance norms. The board had undertaken a study of over 50 different jurisdictions around the world and it was found that corporate governance norms were being regulated through the listing agreement in most of these jurisdictions.

"The single factor behind our decision to amend Clause 49 is to protect the investor community, both domestic and international," Mr Bajpai said.

At the same time, he highlighted that the Narayana Murthy Committee on Corporate Governance would look into the representations received on the changes to Clause 49 of the Listing Agreement on November 17.

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