Regulating unlisted firms

Streamlining existing system will aid corporate governance

The Union Ministry of Corporate Affairs (MCA) is reportedly willing to cede some of its regulatory powers to the Securities and Exchange Board of India (Sebi), specifically those that will allow the market regulator to have some level of oversight of unlisted companies. Such companies, which are not traded on the markets, are not normally subject to Sebi’s direct scrutiny. This is for a good reason — it is to reduce the regulatory burden. Listed companies, which are publicly traded, have higher disclosure, transparency and regulatory requirements in order to protect the interests of all market participants. This logic does