The Securities and Exchange Board of India (Sebi) has emphasized the importance of voluntary compliance with laws, as a way to address wrongdoings in the capital markets, during a recent speech by Kamlesh Varshney, a senior Sebi official. In his address at Assocham’s 15th Capital Market Summit, Varshney stressed that while enforcement is essential, it cannot be the only solution to violations in the market.
Varshney’s comments come in the wake of recent violations by capital-markets participants, including a matter involving Zee Business News. Sebi issued an interim order on 8 February, asking several expert guests who appeared on the channel to pay a ₹7.41 crore fine for allegedly making “unlawful gains” through market manipulation.
The senior Sebi official also highlighted the responsibility of TV channels to ensure transparency and prevent market manipulation by their guest experts, while acknowledging the regulator’s role in enforcement. He also cited instances of front-running at some asset management companies, emphasizing the importance of voluntary compliances to maintain investor trust.
During the same event, Ananth Narayan, another whole-time Sebi member, reiterated the regulator’s fundamental mandates of investor protection, market development, and market regulation. He also emphasized the increasing focus on risks associated with technology use, particularly the threat of cyberattacks.
In summary, Sebi’s focus on voluntary compliance signals a shift in regulatory approach towards addressing wrongdoings in the capital markets, emphasizing the shared responsibility of market participants and regulators in maintaining market integrity. These remarks come amid heightened scrutiny of violations in the financial sector and the regulator’s efforts to ensure sustainable capital formation.
This article was published on 18th February 2024, at 08:31 PM IST.
