Onus on 'field umpire' Sebi to ensure people don't approach '3rd umpire' SAT: ED

Mumbai: Sebi should write regulations in such a way that people do not disagree and end up challenging decisions in the Securities Appellate Tribunal, a senior official said on Friday.

Speaking at the World Hindus Economic Forum, V Sundaresan, an Executive Director associated with the market watchdog for over three decades, said facilitating capital formation and ensuring investor trust is the Sebi's primary responsibility.

"As a field umpire, we need to ensure that people do not disagree with the field umpire and go to the third umpire that I call as SAT," he noted.

The 'game' will be played properly only if the umpire is "impartial" and this will lead to trust among the investors, he said, while speaking in a different context of growth in the mutual fund industry.

The remarks came at a time when concerns are being expressed in several quarters over a majority of the orders by Sebi, resulting in stays or reverses at the SAT.

Sundaresan said stability is very important, and the pursuit of market development should not be done like the roads of Mumbai, where a newly laid road is dug up within six months for some pipe laying.

One needs to balance several factors like inflation, taxation, and duties, among others, to ensure that the market development goal is achieved.

Sebi has adopted a consultative way in the ease of doing business agenda, he said, adding that 250 of 400 proposals have already been implemented and the rest are on the way.

The number of public issuances by companies has grown 7x to 209 per year in the last three years, he said, adding that India is now the biggest by number of such issuances globally and fifth biggest from a capital-raised perspective.

There is a need to convert the savers in the economy into investors, Sundaresan said, pitching for strategies like sachetisation of investments where one should be able to put in Rs 100 as well into a mutual fund.

Mutual funds are the best way to access the market for a common investor, he noted.

The domestic institutional investors have the wherewithal to ensure that the market is resilient even if the foreign portfolio investors withdraw up to Rs 20,000 crore worth of holdings in a single month, he said.

Speaking at the same event, Kotak AMC's Nilesh Shah, who is also a part-time member of the economic advisory council to the Prime Minister, said only five crore Indians have MF investments against up to 12 crore who are reported to have invested in cryptocurrencies.

He advocated efforts to ensure that Indian talent is honed and does not leave the shores.

There is also a need to work on ensuring the rule of law, he said, adding that in the case of fraud, we need to deliver 100 per cent recoveries like the US.

He also pitched for powers of tapping phone lines of fund managers to be provided to the capital markets regulator.