Sebi Sets Up Panels For Economic, Legal Inputs

Mumbai, July 30: | Updated: Jul 31 2002, 05:30am hrs
The Securities and Exchange Board of India (Sebi) has set up two permanent advisory committees — one for market development comprising well-known Indian economists, and the other to vet its legal orders. While the market development panel is headed by Dr Rakesh Mohan, the legal panel is headed by former Chief Justice MN Venkatachaliah.

Speaking to FE, top Sebi officials confirmed these panels were in place, and would perform a key role in developing Sebi into a more focused and forward-looking regulatory authority.

The market development panel would look at ways in which Sebi can aid the development of new instruments in the capital market, particularly in view of imminent changes in the financial sector. With full capital account convertibility expected a few years from now, the feeling is that Indian investors may, if the market does not offer new opportunities, choose to invest overseas. “If Indian investors choose to operate abroad, it will be a terrible thing. Already corporates are raising funds overseas. Sebi will therefore aim to develop the market in advance, before the changes take place in India,” a top Sebi official said.

Others in the economists’ panel are Prof Kaushik Basu, Marti Subramaniam, Dr Arvind Virmani, Prof Suman K Bery and Dr Raghuram Rajan. The idea was to get Indian economists from both overseas and India to advise the markets regulator on the road ahead in view of the changing financial sector scenario.

On the legal side, the Justice Venkatachaliah Panel, which comprises some well-known lawyers, would vet all Sebi orders before they are issued to check for legal language and correctness. Sebi wants its orders to be absolutely beyond criticism as far as legal positions go.