The Securities and Exchange Board of India (Sebi) will seek to lower the cost of capital and ease the regulatory burden to boost India’s competitiveness, its chairman Tuhin Kanta Pandey said on Thursday.
“The cost of capital is an important cost and should come down,” Pandey said at the sixth annual international research conference hosted by the National Securities Markets Institute. “Efficiency, cost-effectiveness of all our measures is important because if you have to build competitiveness (and) there is a compliance burden that is too high in terms of cost and time, then of course competitiveness decreases to that extent,” he added.
Defect in the depository
Addressing last week’s disruption of settlement between two Indian depositories, Pandey said: “First of all, I would like to commend the entire ecosystem, which includes exchanges, depositories, clearing houses and also the brokerage community, which has been providing support to its clients day and night.”
Mint reported on February 4 that several investors who had initiated trades were yet to receive their shares or funds for credit due to a glitch at the National Securities Depository Ltd (NSDL) that affected the settlement process.
“After the root cause analysis, a detailed thing is done and any necessary steps need to be taken in the short, medium or long term,” Pandey said, adding that this could include asking vendors to harden systems or rework legacy software. Older software can sometimes have bugs due to the growing nature of the market, and these need to be properly identified and the software upgraded, he added.
Regulatory impact assessment
Sebi has also set up a Regulatory Impact Assessment Committee and created a separate vertical under the wing of economic and policy analysis. NISM’s Center for Regulatory Studies will examine the issue and an advisory committee of external experts, chaired by Chief Economic Adviser V. Anantha Nageswaran, will help design the framework.
“There are regulatory impact assessments in other jurisdictions as well. That will also be explored – the way it is done elsewhere. But we need to have our own models and research in India,” the Sebi chief said.