Various regulators should work together: Arun Sathe

Interview with Independent director, Sebi

Arun Sathe, independent director at the Securities and Exchange Board of India, says he wants the market regulator and other government agencies to be on the same page on various issues. Edited excerpts of an talk with Sanjay Jog:

Can Sebi, as a regulator, play a bigger role in tackling the bad loan issue, particularly handling of wilful defaulters?

Sebi is playing its role of market regulator. Tackling black money isn't its job. Some steps it has taken. I think the market regulator can control the investment aspect, introduce some curbs, so that money flow is stopped to defaulters.

Since you joined the Sebi board, what key issues have you underscored?

I am trying to understand why the various regional stock exchanges such as Kolkata, Ahmedabad or Delhi have closed. Probably, the then government wanted only the National Stock Exchange to work. My personal impression is that they were not even keen to have BSE; it was not allowed to list but Sebi has now allowed it. More players are required, as we are a vast country. These small exchanges can tap savings, especially in the village economy. I intend to take up this issue after getting correct feedback.

Second, the market regulator must understand what exactly it has to do and what the government expects it to do. The regulator has to understand its limitations. I feel there should an integrated view of Sebi, the Reserve Bank, income tax department and the corporate affairs ministry in tackling key issues. I don’t see it happening much. This is despite representatives of RBI, the finance ministry and income tax department being on the Sebi board. An integrated view among these agencies will be positive in many respects, such as unearthing black money.

Another aspect I am trying to understand is why the Chinese economy affect us as much. It is still a controlled economy and why should it affect our markets? I want to understand if Sebi can do something to de-link our markets with the Chinese one.

The prime minister and finance minister have reiterated the government's resolve to take initiatives for ease of doing business. What are the areas where Sebi can play a role?

Sebi can avoid passing ex parte orders, as it puts a stop to companies doing business.

Second, if somebody wants to become a broker, he has to pass through a number stages. Sebi can look at easing the registration process. Ultimately, Sebi can bring in more transparency and then have control on the financial market. Also, a lot of its orders are getting set aside by the Securities Appellate Tribunal. Perhaps the Sebi members concerned lack judicial training and this can be provided, ensuring a judicious approach while issuing orders.