IOSCO Seeks Sebi Presentation On Corporate Governance Model

New Delhi, January 21: | Updated: Jan 22 2003, 05:30am hrs
Global market regulators are keen to have a close look at a model for assessing corporate governance, developed for the first time in the world by the Securities and Exchange Board of India (Sebi).

The International Organisation of Securities and Exchange Commission (IOSCO) has requested Sebi to present its new model at its next Asia-Pacfic meeting in Colombo this week, Sebi chairman GN Bajpai said here.

At Sebis request, rating agency Crisil will give a presentation of its model to assess creation, management and sharing of wealth by corporates for the first time at IOSCOs meeting.

Corporate governance is one of the contemporary issues with IOSCO. It has asked us to give a presentation on the issue at the Colombo meeting. We have asked Crisil, which have developed the model to assess wealth creation, wealth management and wealth sharing, to accompany us and give the presentation, Mr Bajpai said.

Crisil Chief Ravi Mohan will give the presentation in Colombo about the model, which is now being used to rate the success of corporate governance in India.

Crisil has developed a rating mechanism whereby the extent of wealth creation, management and sharing could be assessed on a scale of eight points.

HDFC, HDFC Bank and Hero Honda are set to get category 1 rating while Dabur is slated to get category two.

The efforts to develop a sound governance model comes in the wake of a series of corporate frauds and failures worlwide that has severly affected major markets. Crisil and Icra have already started rating corporate governance in the country. The committee on corporate governance under Sebi, headed by infosys chief NR Narayana Murthy, is also looking at the present norms and is expected to upgrade it.

India is the pioneer in this field, sebi said, addingthe country has initiated a number of other things like straight through processing (stp) for share transactions.

STP along with real time gross settlement (RTGS) would help the market regulator to shift to T+1 (transaction date plus one) rolling settlement scheme from April 2004.

The regulator is all set to implement T+2 settlement system from April this year as against the T+3 system prevailing now.