Need for Big­ger, Cleaner and Safer Mar­kets: Ajay Tyagi

FICCI Business Digest - - Contents -

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.

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