Sebi chairman warns against retrospective changes in policies

Mumbai, June 14: Sebi chairman U K Sinha on Tuesday warned against retrospective changes in policies even as he expressed concer ns that some countries have low reciprocity related to norms, including anti-money laundering and taxation.

“Should there be element of reciprocity or not? Can one country impose its will over others without caring for reciprocity,” Sinha said at the “The Gateway of India dialogue” here. “Unfortunately the current situation is that where reciprocity is not adequate,” he added.

Giving examples, Sinha said anti-money laundering laws are not being guided by fair play as some countries have made alternate efforts to attract corporations to a particular jurisdiction. He further said that in some cases these efforts are not only for tax avoidance, but also tax evasion.

He noted that every country has the legitimate right to frame its own policies, but when it comes to the foreign investors they need assurances that the changes in policies would not be retrospective.

“Retrospective implementationof law should be frowned upon, ”he said. Additionally, he said foreign investors also need equal protection of law as given to domestic investors. Observing the need to have a strong Asian market, Sinha said that in 2003 there was serious attempt at building one.

“We must blame ourselves that we could not move forward. So savings of entire Asia is going into other jurisdictions and requirement of Asia is not being,” he said.

Sebi chief U K Sinha