The capital market regulator is still in the process of finalising regulations on the contentious issues of algorithmic and high-frequency trading, UK Sinha, Chairman, SEBI, said.
“Regulators worldover are struggling to find a solution to this and will not compromise market integrity,” Sinha said, emphasising the difficulty in finalising where the regulator must take a stand. “While we want to take a decision, we don’t want to do anything in a huff. After seeking the help of experts, we will be taking a final view,” Sinha added.
In August, the Securities and Exchange Board of India published a discussion paper proposing new rules that would tighten the regulations on computer-led trading in the markets. These proposals include slowing down the speeds of such trades and creating a more level-playing field between robots and human traders.
Tightening rules on corporate governance is another focus area for SEBI, Sinha said, speaking at a conference organised by lobby group Federation of Indian Chambers of Commerce and Industry.
Corp governance rules “Over the last few years, SEBI has tightened rules on corporate governance, empowering independent directors, brining in rules on related-party transactions and the rotation of auditors,” Sinha said. “We also wanted to bring in more gender diversity in the boards of companies,” Sinha added, recalling SEBI’s recent attempts to get companies to appoint at least one woman director to their boards.
As a fallout of this measure, since SEBI itself was criticised by India Inc for not having a woman member on its board, Sinha said, “SEBI does not control the appointment of members to its board.
“We have made a request to the Central Government to have at least one woman member.” Additionally, SEBI will also allow the non-executive members of its board to conduct an additional audit, further strengthening its own governance processes.
Instilling faith In the coming months, SEBI will work on increasing the numbers of products and participants in the commodities market while also spearheading a clean-up of the stock exchanges with regard to companies where trading has been suspended for long periods of time.
Referring to the revival seen in the primary market over the past year, Sinha also said there remains room for making the market more efficient. “We have been able to bring down the issue timing to T+6 days from T+12,” he said.
“I’ve asked my team to work on reducing this further to T+4.” The calculation refers to the time lag (in number of business days) between the close of an IPO and the date of the stock’s listing on the exchange.
The IPO process itself has instilled more faith among retail investors, Sinha added, going by the number of such investors participating in new issues.
The rigorous enforcement of disclosure norms by merchant bankers and companies has helped bring in a situation where more than two-thirds of the primary market issues trade over their issue prices, Sinha added.