World Bank, IMF to assess Sebi’s regulatory framework KEEPING CAREFUL WATCH

Securities and Exchange Board of India will go through a third-party assessment of its regulatory framework by the World Bank and the International Monetary Fund (IMF) this year, an exercise which will help Sebi align itself closer to global regulatory standards and get feedback on its current functioning. The assessment will be conducted as part of the Financial Sector Assessment Program (FSAP), a joint programme of the IMF and World Bank established in 1999. The programme analyses the resilience of a country's financial sector, the quality of its regulatory and supervisory framework, and the capacity to manage and resolve financial crises.

This is the third time Sebi is going through this programme, with previous supervisions in 2012 and 2001. In September 2010, IMF had made it mandatory for 25 jurisdictions (including India), with systemically important financial sectors, to undergo financial stability assessments under the FSAP every five years.

Among others, the programme will test the regulations by Sebi and the manner in which they are being implemented, said sources. The market impact of the regulations on the financial sector, including the cost of compliance, will be scrutinised. Accounting and auditing standards as well as financial disclosures by listed firms will be examined. "While the programme will look at the theoretical aspect of regulation, it will also assess the manner in which the rules are being practically implemented. This will serve as a gap analysis and lay down the road map for future regulatory changes," said J N Gupta, managing director at Stakeholders Empowerment Services, and ex-executive director of Sebi.

World Bank and IMF to assess Sebi’s regulatory framework

The assessment will part of the duo's Financial Sector Assessment Program or FSAP

The programme analyses the resilience of a country’s financial sector and the quality of its regulatory framework Compliance cost, accounting and auditing standards, as well as financial disclosures by listed firms to be scrutinised

Building resources and disposing of cases quickly are some of the areas the regulator needs to work on

This is the third time Sebi is going through with this programme, with earlier supervisions made in 2012 and 2001