‘Clearing misconceptions on compliance costs is challenging’

“There is a great need to take young entrepreneurs in India to the next level of growth and encourage them to look at public markets while raising funds. That’s where you — researchers and schools such as the IIMs — can play a significant role,” said UK Sinha, Chairman, the Securities and Exchange Board of India.

Speaking at the fourth India Finance Conference at IIM-Bangalore, Sinha shared his experience with first generation entrepreneurs in Coimbatore — the largest and most active of SME clusters in the country. “One of the challenges was in clearing their misconceptions about compliance costs if they chose to take the public market funding route.”

Lauding academicians at all the three IIMs — Bangalore, Ahmedabad and Calcutta — for organising a conference such as the IFC, he said the meet had “remarkably grown in eminence and stature.” “SEBI has a strong research component in the National Institute of Securities Markets (NISM) that creates capable professionals, so it makes eminent sense to link the work of NISM with the work of the IIMs,” UK Sinha said.

SEBI, he said, remains a unique organisation, because it has responsibilities and functions that are legislative, executive and quasi-judicial in nature.

Listing the market measures taken by SEBI, he said the regulator was actively working with the SIT on black money, on REITS to promote the real estate market, providing avenue for small investors to participate in the market and a platform for SMEs to access capital.

Sinha said SEBI’s work on protecting the interests of shareholders was paying off. He cited the October 2014 World Bank report on ‘Ease of Doing Business in India’ that ranked India seventh in the world on the scale of shareholder protection. (India was ranked 49 in 2012 and 34 in 2013).

Corporate governance came in for special attention in Sinha’s talk as he detailed SEBI’s directives to listed companies on increasing diversity in their boards and having independent directors with ceilings on their term of office; in ensuring that the top 100 companies bring out a business responsibility report in their annual reports; and on taking serious note of abusive related third-party transactions.

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