Sebi proposes mandatory maintenance of communication record for eight yrs

Markets regulator Sebi on Thursday proposed to make it mandatory for all entities regulated by it to maintain communication records, including acknowledgements, for at least eight years.

The move is aimed at improving regulatory compliance, increase transparency, protect investors' interest and boost their confidence in the securities market.

In its consultation paper, the regulator suggested that all entities regulated by it should maintain records of all required communications, including acknowledgements, for at least eight years as per their governing regulations.

These records must be made available to Sebi upon request, ensuring transparency and accountability.

The Securities and Exchange Board of India (Sebi) has sought comments on the consultation paper till September 13.

Under the current regulatory regime, Sebi-regulated entities are mandated to communicate various types of information to numerous stakeholders. This enables a regular and timely disbursal of information to the relevant stakeholders.

However, the record of such mandatory communication is required to be maintained only for a limited class of communication.

The record of the relevant documents such as books of accounts etc., which are mandated to be preserved under the securities laws, serve as an audit trail to identify breach of the securities laws, if any, Sebi said.

However, where the relevant information is required to be communicated, as mandated under the provisions of the securities laws, the content that is actually communicated is often difficult to ascertain, unless mandated to be maintained, it added.

Sebi said that only a limited class of mandatory communication is required to be maintained. The legally verifiable record of mandatory communication would help in resolving investor grievances, protecting the interest of investors and identifying instances of breach of provisions of the securities laws, if any, by providing the relevant evidence of the content of such communication.