The Securities and Exchange Board of India (Sebi) is looking at ways to bring about more transparency in regulations for related party transactions and appointment of independent directors. The capital market regulator is also working on initiatives to increase market penetration in Tier-II and Tier-III cities.
?One area for concern is related party transactions and we are looking at ways in how we can bring in more transparency,? said Usha Narayanan, executive director, Sebi. She said the capital market regulator has already submitted its views on this matter to the finance ministry and the proposed Companies Bill ?may have certain provisions?.
Speaking at the Oxford Business Forum 2012, Narayanan said Sebi is looking at global practices related to the appointment of independent directors on the board of companies to plug the issue of abuse and misuse of power by the company management. ?There are various ideas being floated and one may see some action in this area,? she said.
The regulator is also looking at whether to allow non-profitable companies to list on the main exchange or to send them to the small and medium enterprises (SME) platform.
Sebi, which has increased its focus on investor education and awareness in the last few years, is looking at leveraging technology in a better way to attract more investors. ?We are working on some initiatives in this regard to increase penetration in smaller towns and attracting more investors in the capital market. Our focus is to increase the share of small savings that is channelised into the equity market,” she said.
Also speaking on the occasion, former deputy governor of the Reserve Bank of India (RBI) Usha Thorat said tighter regulations ?may be sacrificing growth in the shorter term, but are necessary for sustainability of long-term growth?.