Sebi board to reveal 'conflicts of interest' to public: Tuhin Kanta Pandey

In his first public address after taking charge, Pandey emphasised that bold reforms don't have to be "big bang"

The Securities and Exchange Board of India (Sebi) will soon make public disclosures on “conflicts of interest” of its board to ensure transparency and build trust in the market, Chairman Tuhin Kanta Pandey said on Friday.

 

In his first public address since taking charge of the securities watchdog, the former finance secretary emphasised the need for trust and transparency for all stakeholders.

 

His predecessor, Madhabi Puri Buch, had come under scanner for alleged holdings in offshore funds and owning a stake in an advisory firm, raising questions about Sebi’s objectivity.

 

“I think the trust and transparency extends to Sebi itself...I think we need to be more transparent, including on various other measures, for example, on the conflict of interest of the board and so on. And we will be coming forward with our own plan to further transparently reveal these conflicts of interests, etc. to the public,” Pandey said at a summit by MoneyControl.

 

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These comments, however, were not part of the speech copy uploaded on Sebi’s website.

 

Pandey highlighted the need for regulatory bodies and corporations to uphold the highest standards of governance, disclosure, and ethical practices.

 

Hinting at a shift in Sebi’s working style, he said: “Bold reforms need not be a big bang. Many times, small reforms cumulatively are more effective. Going forward, Sebi will use a right mix of both to achieve the objectives.”

 

He added that the regulator will be looking for optimum regulations and will review older norms.

 

“The capital market is a dynamic space, so change is imminent. But we will certainly not be looking for maximum regulation, but for optimum regulation. If some statutes are redundant and outdated over the years and not serving any purpose, we are happy to review the same and change them. We are open to ideas on this,” said the chairman.

 

Pandey reiterated his vision of “teamwork, trust, transparency, and technology” within Sebi and stressed the importance of cooperation with the industry.

 

He also called for ease of doing business at all three touch points — of entry, transacting, and exit.

 

“Foreign portfolio investors (FPIs) may react to global events and come in and out. Nevertheless, I think domestic institutional investors have stably filled up the gap in many ways. Not to say that FPIs are not important...As we intend to grow at the speed that we are aspiring, we need to have both domestic and foreign capital to support the growth momentum,” said Pandey, adding that Sebi is conscious about the need to create a conducive environment to attract foreign capital.

 

Pandey also highlighted Sebi’s efforts to foster financial inclusion through market products, such as low value mutual fund SIP, small and medium REITs, and specialised investment funds.

 

“The market is not a straight path. To ensure that the investors are not lost in labyrinths, investor awareness and education is very crucial. An informed investor is self-protected,” said the new Sebi chairman.