Internal committee is in discussion to resolve NSE IPO issue: Sebi Chief Tuhin Kanta Pandey

The Securities and Exchange Board of India (Sebi)’s internal committee is discussing to resolve NSE IPO issue, said Tuhin Kanta Pandey, Chairperson of the capital markets regulator. NSE has been trying to get a regulatory clearance to go for an IPO since 2016 when it first filed its draft papers stating its intention to raise Rs 10,000 crore through an offer for sale by existing shareholders.

As per reports NSE had also recently applied with Sebi requesting a no objection certificate (NOC). However, regulatory hurdles, primarily linked to the co-location scandal, tech glitches have delayed its listing. He also said that the regulator will not allow commercial interest to take over public interest and it is for the regulator to ensure this happens and that it is the market regulator's job to find companies who are involved in fraud and punish them.

Pandey said, “There will be companies like Gensol in the system. Sebi’s job is to find and punish them. The regulator will not allow commercial interest to take over public interest and it is for the regulator to ensure this happens.” this is after the regulator uncovered financial irregularities at Gensol Engineering.

Speaking at the CII Corporate Governance Summit in Mumbai on April 17, he spoke about how corporate governance is important to protect the interests of shareholders and maintain the integrity of the market. So, governance failures in large corporates can have ripple effects across the market and economy, “Preventing such failures, is essential to maintaining financial stability. By mandating disclosures, board structures and oversight mechanisms, we aim to create a self-regulating environment that encourages ethical and responsible corporate behaviour,” He further said that to ensure transparency and information symmetry in the market, Sebi has specified periodic disclosures of certain information such as quarterly disclosure of shareholding pattern, compliance with corporate governance requirements, financial results and deviation and utilization of funds to prevent information asymmetry.

He emphasized that there is a need for optimum regulation and there is a need to remove what is no longer relevant and reduce overlaps. He said, “SEBI has laid down a comprehensive governance framework on the corporate governance. We have taken measures to protect the interest of investors and at the same time tried to facilitate ease of doing business. But to achieve the desired objectives, we need to have a collaborative ecosystem. There needs to be a balance between regulation and ease of doing business. We are conscious that over regulation can stifle growth and innovation. At the same time, too little regulations can also lead to decline interest of stakeholders and adversely impact growth.”

He also talked about SEBI’s initiatives to strengthen the independence of independent directors and enhance their effectiveness in the protection of interest of minority shareholders. He said, “The regulator has made is mandatory that at least two third of the members of the audit committee must be independent directors. For ease of doing business, he said that SEBI has introduced a single filing system for listed entities. “Tech enabled single filing system now eliminates the requirement of filing the same documents across multiple exchanges.” he added.

Lastly, he said that governance is not about ticking boxes, it's about building institutions that can be trusted for years and that it's. It's not an easy path as it involves sacrificing some short-term gains, but it is the only path to have sustainable growth and development of a pathway.