The Securities and Exchange Board of India (Sebi) is not interested in quarterly guidance and forward looking statements being issued by the corporates, said M Damodaran, chairman, Sebi. The quarterly guidance is putting additional pressure on companies rather than helping them to focus on their growth strategy. The 90-day period is too short to give a guidance, he said while addressing the ?National Conclave on The Changing Face of Financial Leadership? organised by the Confederation of Indian Industry (CII) here on Thursday.
Because of pressure from different quarters, including from analysts, and shareholders, at times corporates are forced to do `financial engineering? to meet the guidance. ?Can something been done without analysts? pressure, the corporates should think about this,? he said. The compliance should come from within. Corporates need to distinguish themselves from fly-by-night operators. ?One cannot bring in legislation for honesty,? he said.
Of late, the CFO?s role has become a challenging one.The CFO?s position will become more relevant than the CEO?s. The CFOs should get into all territory and play a central role in the journey of convergence in accounting standards, he said.
The Sebi chairman was also critical on the functioning of regional stock exchanges. ?In size we are growing manifold and a committee is working on new products. It is time for those regional stock exchanges (REs) which do not have business to stop their innings. The days are over for them. There is no economic value for doing business any longer. The number of exchanges should be reduced sharply,? he pointed out.
According to him, at a time when foreign companies want to increase presence in India, more and more Indian companies want to become a private entity due to more regulatory norms. The risk rate is high being a private entity than a listed company and in the long-term the listing will be helpful to grow aggressively in a more transparent manner, he added.
Admitting that the regulatory authorities have not done enough for investor education, he said, Sebi in association with corporates will unveil National Institute of Securities, being set up on the lines of Indian School of Business (ISB) to educate the investors in different areas, including investing in stocks, and corporate social responsibility.
The Institute will house six different schools within itself.