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Capital markets: SEBI chairman optimistic

Governance is of utmost importance


Governance is of utmost importance




The Securities and Exchange Board of India (SEBI) chairman Ajay Tyagi has expressed “great hope and optimism for Indian capital markets” as envisioned by the Government.

“Indian securities markets exhibited positive trend during 2017-18 with increased resource mobilization through issue of equity as compared to the previous financial year, he told the inaugural session of 15th CAPAM, the Annual Capital Market Conference.

“And the current year promises even more action,” he added at the conference organized by the Federation of Indian Chambers of Commerce and Industry (FICCI) in Mumbai on 11 Sept 2018.

“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 said.

“Governance is of utmost importance. As the market grows, we need greater governance norms to keep the faith and trust of investors,” Tyagi said.

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 Chairman and CEO, enhanced focus on Independent Directors etc.

It is believed that these measures would further strengthen governance, leading to increased investor confidence, some of the mainstays of SEBI.

Market integrity and fair conduct are cornerstones of an efficient capital market. It is extremely important to prevent fraudulent and unfair trade, he said.

Among important issues he flagged up were development of the corporate bond market, ease of doing business and deployment of data analytics and new generation technologies.

“Indian capital markets have achieved a lot in the last 25 years and today are as good as anywhere in the world,” observed Rashesh Shah, President, FICCI and Chairman & CEO, Edelweiss Group.

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, he pointed out.

To achieve the vision of capital market in New India 2022, he highlighted “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: “we are at an inflection point for transformative change and need to effectively balance capital management, risk and regulation for growth of the market.”

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