No systemic risk yet from bitcoin, says Tyagi
The Securities and Exchange Board of India (Sebi) feels crypto currencies, fast gaining popularity, don’t pose a systemic risk for Indian markets at present but what is unfolding needs watching. Speaking at a CII Financial Markets Summit, Ajay Tyagi, chairman of Sebi, said: “Bitcoin does not pose a systemic risk right now but the area can't be ignored. The ministries of finance and information technology are looking into it, in consultation with the Reserve Bank of India (RBI).”
Bitcoin and other virtual currencies are catching the attention of investors, thanks to a meteoric rise in their prices this year. There are no regulations for investors to deal in these new-age currencies. Tyagi also said Sebi was considering an overhaul of the consent mechanism, used by alleged wrongdoers to settle disputes. "We are revisiting the settlement norms and have started rewriting certain regulations, to make these simpler,” he said.
Experts say easing of the consent settlement norms will help on the huge backlog of cases pending with the markets regulator. Currently, insider trading and takeover code-related violations are kept out of the consent settlement route. Going ahead, the regulator might allow any type settlement through the consent route, experts said.
Further, said Tyagi, that regulator needs to balance investor protection and punitive action to promote ease of doing business. “We are trying to totally revamp the enforcement part…. we should not take cases upon ourselves which we can't handle," he explained. He said they'd go after violations based on merit.
On corporate governance, he said they were examining all the recommendations in the experts committee report in this regard. “We will take a view after consulting with the ministry of corporate affairs and other regulatory bodies. There is no question of contradiction with the parent Companies Act,” he said.
Tyagi also touched upon issues with the central Know Your Customer (KYC) concept, announced in 2014-15. Tygai said a simpler method could be based on one's Permanent Account Number (for income tax) and the biometric Aadhaar identity. If those two match, it would be very difficult to say anything else is required.