Sebi has suggested the government to appoint at least one woman director on the regulator’s board, in line with its own directions for listed companies’ gender diversity on high-table under corporate governance norms.
The Securities and Exchange Board of India (Sebi) had issued guidelines in February 2015 asking companies to appoint at least one woman director on their boards.
“Sebi or its board does not appoint its own board members, the board members of Sebi are appointed by the government,” Sebi Chairman U K Sinha said here.
“But we have already taken up with the government that we must have at least one woman member on Sebi board although there is no such legal requirement. The Sebi Act does not prescribe it but as a good measure we have asked the government to do it,” he added.
The clarification came on the back of various entities including the media raising queries on Sebi’s own board not having any woman representative in line with the corporate governance norms issued by it.
Among others, corporate governance norms ensure that every company has at least one woman board director.
“Most of the corporate India has happily introduced it, those who have not done so I would exert them to do so as early as possible,” Sinha said.
Interestingly, Sebi Chairman also said that Sebi board in its last meeting has ‘voluntarily’ decided that its non-executive members can meet separately and evaluate the performance of the regulator.
While noting that the corporate governance rules established in the country have given thorough confidence to the investors all over the world, the Sebi chief said most of corporate India has supported the norms even as some entities had expressed reservations on it.
Further, Sinha expressed the need to clean up “historical baggage” for the capital markets going forward. In this respect, the Sebi chairman said delisting companies which have been suspended from the stock exchanges over a long period of time was a priority.
Noting that Sebi has issued detailed guidelines for such firms and its promoters, Sinha said the same set of norms would be enforced with respect to regional stock exchanges.
Sinha was speaking at the annual capital market conference organised by FICCI.
The issue of the companies listed on regional stock exchange, which have now exited, would be addressed through this mechanism, Sinha said.
He also said Sebi in the coming months will bring out detailed guidelines on algorithm (algo) or high-frequency trades.
“World over, the regulators are struggling to find out solution to this issue (algo) to ensure market integrity and that there is fairness,” Sinha said adding that final view on the issue would be taken after extensive consultation with all stakeholders.
Taking about new products in the market, Sinha noted that the country should be able to see registrations of many InvITs (Infrastructure Investment Trusts) and REITs (Real Estate Investment Trusts) by end of this fiscal as Sebi has resolved various issues facing these instruments.
Sebi has already registered three InvITs while three other proposals are awaiting the regulator’s clearance. It has also received several queries for setting up of REITs.
Sinha said the year-after Sebi took over the mandate to regulate commodities market, it is ready to bring in more products and participants into this segment.
Meanwhile, the Sebi chairman observed that a number of companies and promoters were reluctant to enter the primary markets because they were unsure of Sebi policies.
However, Sinha said Sebi has tried to resolve those issues, for instance the regulator has decided not to take any penal action against unlisted companies which have issued securities on private placement basis to over 50 people.
As per revised norms, a private placement can be made to a maximum of 200 people as against earlier limit of 49 people.
“So now as per our norms, no deterrent action will be taken against such companies. If you are ready to refund the money to erstwhile investors and you have got compounding from registrar of companies….Now more and more such companies are coming for primary issuances,” the Sebi chief said.
Sinha also said domestic savings in the country which have been mobilised through mutual funds are serving to a counter-balance to any fund outflows by foreign investors.