The Securities and Exchange Board of India (Sebi) executive director JN Gupta on Monday said the regulator has not yet formed a view on the recommendation submitted by the Bimal Jalan committee. Sebi has given time till December 31 for market participants to send their suggestions and comments. ?Once the public comments are received, Sebi will follow its normal process of actions,? he said. But Gupta, who was also a member of the Jalan Committee, which reviewed the ownership structure and corporate governance of the market infrastructure institutions (MII), said the committee had tried to suggest measures that could keep pace with fast changing market practices and are capable of handling the outcome of a potential risk posed by these institutions.
Other panelist who had come against the committee’s key recommendations stated that globally stock exchanges remained stable even as big banks and financial institutions collapsed and hence there was no need for imposing stringent restrictions on stock exchange’s operations. Gupta responded, ?During the 2008 financial market crisis, short selling was banned across the globe. The US securities market regulator Securities and Exchange Commission (SEC) had a discussion with Sebi. But we didn’t feel the need for banning short selling in the Indian market as the regulator was confident on the robust risk management system of the domestic exchanges to face any kind of impact.?
He noted that in the US and Australia, the surveillance and regulatory functions of the stock exchanges have been hived off to a separate body that reports directly to the regulator. ?As of now our markets are not in such a stage to experiment with,? he said adding that as and when there is a genuine requirement, we can look into it. Finsec Law Advisors founder Sandeep Parekh stressed on the need for hiving of regulatory functions from the stock exchange. ?Regulations should move out of the exchange’s. That is where the whole world is moving towards,?he said.
