Need for Bigger, Cleaner and Safer Markets: Ajay Tyagi
FICCI organised its 15th edition of FICCI's annual flagship Capital Market Conference - 'CAPAM' on 11 September, 2018 in Mumbai, wherein SEBI chairman Ajay Tyagi stressed that the overall vision for the market regulator should be to have bigger, cleaner and safer markets.
Addressing the inaugural session, the SEBI chairman said, ‘SEBI is committed to facilitating further growth of markets. SEBI is equally committed to ensuring clean and safe markets. We are duty-bound to ensure that the market mechanism is not misused or manipulated by unscrupulous elements. It is but natural to keep focus on safety issues, including systemic risks.
‘Continued investor confidence is a crucial factor in attracting more investors to the securities market. Right governance framework and a transparent and clean market go a long way in meeting these expectations.' ‘SEBI will continue to focus on further enhancing the overall governance standards in the market, be it for issuers, intermediaries or market infrastructure providers,’ he added.
The theme of the conference was 'Blueprint for Capital Market in New India 2022'.
‘Indian securities markets exhibited positive trend during 201718 with increased resource mobilisation through issue of equity as compared to the previous financial year. And the current year promises even more action,’ he said.
This success could be attributed to stable macro-economic fundamentals, political stability and the structural reforms that the present government has been endeavouring towards over the last couple of years. Backed by strong inflows and increased participation of retail investors, the Indian IPO market witnessed heightened activity in the previous year.
He further added in order to improve the corporate governance framework, several recommendations of the committee chaired by Uday Kotak have been implemented, such as enhanced role of the Nomination & Remuneration Committee, separation of the roles of the Chairman and CEO and enhanced focus on independent directors. It is believed that these measures would further strengthen governance, leading to increased investor confidence, some of the mainstays of SEBI.
With technology playing as key role in day-to-day activities, Tyagi said that SEBI is strengthening its own technology and enhancing that of market intermediaries.
He further added that SEBI is focussed on enhancing its in-house analytics capability and its surveillance systems.
‘Going forward, increase in use of machine learning and artificial intelligence among other technologies, in the capital markets is a writing on the wall. The complexities in the capital markets are only going to increase with time. SEBI needs to quickly upgrade its regulatory capacity to properly comprehend the nuances of technological changes with a view to staying ahead of the curve,’ said Tyagi.
CAPAM's discussion agenda highlighted the need for alignment of the capital market policy framework with the structural reform agenda being proposed by the government for New India 2022 and the critical role of issuers, investors, banks and rating agencies in the process.
Rashesh Shah, President, FICCI and Chairman & CEO, Edelweiss Group observed that, ‘Indian capital markets have achieved a lot in the last 25 years and today are as good as anywhere in the world.’ He said that capital markets are now complementing the banking system. With the expansion of asset class which includes bond markets, currency futures and the commodities market, they are poised to become multi-asset class.
To achieve the vision of capital market in New India 2022, he highlighted that we must have a credit market, which is equally developed as the equity market. Decrease in intermediation cost is indispensable for this to happen. Shah also mentioned that due to increase in regulatory requirements, the strategy function of boards has been subsumed in their enhanced compliance functions which affects the competitive edge of Indian businesses; stressing on the need to strike a balance between the need for higher reforms and the costs and efforts involved.
In his theme address, Sunil Sanghai, Chairman, FICCI Capital Markets Committee, emphasized some of the critical factors which would play an important role in the growth of capital markets in the next couple of years. These include facilitative regulatory framework, enhanced governance, availability of capital and a vibrant bond market to meet funding needs of the economy.
Shilpa Kumar, Co-chair, FICCI Capital Markets Committee & MD and CEO, ICICI Securities Ltd. said that we are at an inflection point for transformative change and need to effectively balance capital management, risk and regulation for growth of the market.
Himanshu Kaji, Co-chair, FICCI Capital Markets Committee and Executive Director & Group COO, Edelweiss Financial Services Limited, offered the concluding remarks at the inaugural session.
Ajay Tyagi, Chairman, SEBI (right) with Rashesh Shah, President, FICCI.