The Securities and Exchange Board of India (Sebi) will look to reduce the cost of capital and lighten regulatory burdens to sharpen India’s competitiveness, its chairman Tuhin Kanta Pandey said on Thursday.
“The cost of capital is an important cost and it should come down,” Pandey said at the sixth Annual International Research Conference hosted by the National Institute of Securities Markets. “Efficiency, cost efficiency of all our measures is important because if you have to build competitiveness [and] there is a compliance burden on regulation which is too high in terms of cost and time, then obviously to that extent the competitiveness also goes down,” he added.
Deposit glitch
Addressing last week’s settlement disruption between India’s two depositories, Pandey said, “First of all, I would compliment the entire ecosystem, which includes exchanges, depositories, clearing corporations and also the broking community, which provided day-and-night support to their clients.”
mint reported on 4 February that several investors who initiated trades were yet to get their shares or funds credited because of a glitch at the National Securities Depository Ltd (NSDL) that affected the settlement process.
“After the root-cause analysis, a detailed thing is done and whatever necessary action needs to be taken short term, medium term, long term, that is done,” Pandey said, adding that this could involve asking vendors to strengthen systems or rework legacy software. Legacy software may sometimes have glitches because of the growing nature of the market, and these must be suitably identified and the software upgraded, he added.
Regulatory impact assessment
Sebi has also set up a committee on regulatory impact assessment and created a separate vertical under its economic and policy analysis wing. The NISM Center for Regulatory Studies will examine the issue, and the external experts advisory committee chaired by chief economic advisor V. Anantha Nageswaran will help design the framework.
“There are regulatory impact assessments in other jurisdictions also. That will also be studied – the way it is being done elsewhere. But we need to have our own models and research in India,” the Sebi chief said.
