Addressing the CII national council meeting here today Sebi chairman, U K Sinha said, "The three growth mantras of Sebi are transparency, accountability and minority principle. If these are not compromised, then the market can deliver as expected. There is also a need to implement regulations both in letter and spirit."
"Globally, investors are in a state of unrest and this is intensifying, while the use of technology is adding to the intensification. Any small violation is being made an issue and this actually helps establish ‘shareholder democracy'," Sinha said.
Stating that there are as many as 11,000 companies which violate Clause 35 of the Companies Act, pertaining to shareholding pattern, as well as 900 companies violating Clause 39 pertaining to corporate governance, Sinha said that there is a need to implement regulations both in letter and spirit.
He said that globally, certain foreign regulations have impact on domestic banks and industry needs to analyse and react to these in an appropriate manner.
Alluding to the process of bringing in new regulations, he said: "There has to be continuous evolution of regulators. On any regulation, there should be consultation- about content as well as rules and regulations, and they should be open to serious review and criticism."
Speaking about the state of the primary market, Sinha said that in the past couple of years there have been significant improvement in the corporate bond market, which he attributed partly to the recent permission given to the Employees' Provident Fund Organisation (EPFO) to invest in corporate bond markets.
Observing that companies are sitting on huge piles of cash but not investing in the market, he called upon the industry to encourage retirement savings to be diverted to the market, which would help counter balance foreign investments.