We At SEBI Need To Be More Transparent On Conflict Of Interest In Board: Tuhin Kanta Pandey

Summary

The newly appointed SEBI Chairman, Tuhin Kanta Pandey, delivered a keynote at the Money Control event, discussing the global economic challenges and India's resilience in facing them. He highlighted the country's strong economic growth outlook, supported by a focus on infrastructure, fiscal consolidation, and government capex. Pandey emphasized the critical role of securities markets in driving economic growth, boosting investor participation, and fostering innovation. He also touched on the importance of regulatory reforms and transparency in creating a robust financial ecosystem, with a vision for India to become a global investment hub supported by long-term capital inflows.

Takeaways

• 😀 SEBI's new chairman, Tuhin Kanta Pandey, highlights the importance of building resilience to withstand global economic challenges, such as geopolitical tensions and rising uncertainty.
• 😀 India’s economic growth outlook remains strong with a projected 6.5% growth rate for FY 2024-25, driven by factors such as healthy fiscal consolidation and robust infrastructure investments.
• 😀 The role of the securities markets in fueling economic growth is crucial, as they channel savings into productive investments, thus driving overall economic development.
• 😀 India’s securities markets have seen tremendous growth, with 136 million investors in SEBI’s ecosystem and an increase in mutual fund participation over the years.
• 😀 India’s focus on expanding retail investor participation, including through digital platforms, has led to increased engagement and greater market resilience.
• 😀 A diverse range of capital sources, including equity, debt, and innovative products like REITs and municipal bonds, plays a vital role in funding infrastructure development and economic expansion.
• 😀 SEBI’s regulatory framework ensures the development of new market products while maintaining investor protection, reducing risks, and promoting market transparency.
• 😀 The Indian capital market's increasing role in attracting long-term foreign capital supports infrastructure growth, innovation, and entrepreneurship across the country.
• 😀 Technology is recognized as a powerful tool for improving market efficiency, transparency, and integrity, which will help foster a conducive environment for both domestic and foreign investments.
• 😀 SEBI emphasizes the importance of maintaining high governance standards, transparency, and ethical practices within the market to strengthen trust among investors and participants.

Q & A

What is the economic growth outlook for India as discussed by SEBI Chairman Tuhin Kanta Pandey?

India is projected to grow at 6.5% in FY24-25, indicating a strong economic growth outlook. This places the country among its peers with a resilient growth trajectory despite global headwinds.

What are the key pillars of India's economic resilience mentioned by the SEBI Chairman?

The key pillars of India's economic resilience include fiscal consolidation, low current account deficit, low external public debt, a healthy banking system, and a strong forex reserve buffer.

How has India's securities market contributed to the economy, according to the Chairman?

India's securities market has played a crucial role in converting savings into productive investments, fostering economic growth by providing businesses with efficient capital-raising platforms and reducing pressure on traditional banking channels.

What role does SEBI play in the development of India's securities market?

SEBI provides the regulatory framework that supports the development of innovative financial products, ensures market transparency, and protects investor interests while fostering a conducive environment for market growth.

What are some of the major reforms the government has outlined in the economic planning?

The government has focused on reforms in agriculture, MSMEs, taxation, the power sector, urban development, mining, and the financial sector, all aimed at enhancing economic growth and market development.

How has investor participation changed in India's securities market over recent years?

Investor participation has increased significantly, with the number of unique investors rising from 49 million in 2020 to 136 million. Mutual fund inflows have also seen a significant increase, especially into risk-oriented mutual funds.

What does SEBI intend to do to improve market transparency and investor trust?

SEBI aims to enhance market transparency by focusing on governance, disclosures, and ethical practices. It is also committed to maintaining trust by reviewing and updating outdated regulations to ensure they remain relevant and effective.

How does SEBI plan to encourage voluntary compliance among market participants?

SEBI plans to engage with stakeholders to promote voluntary compliance by encouraging self-regulation and enhancing awareness about best practices in the market.

What is the significance of technology in the future of India's securities market?

Technology is expected to play a major role in improving market efficiency, transparency, and integrity. SEBI intends to use technology to make processes more streamlined and to ensure better investor engagement through digital platforms.

How is SEBI planning to address the challenges related to foreign portfolio investments (FPIs)?

SEBI acknowledges the challenges posed by foreign portfolio investments (FPIs) and is committed to fostering a regulatory environment that encourages FPI participation while balancing it with robust domestic institutional involvement, ensuring market stability.