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We plan to cover all aspects of `three I's, says Bajpai

Nilanjan Dey

KOLKATA, July 8

THE Securities and Exchange Board of India is working on a multi-pronged strategy that will cover all aspects of what its Chairman, Mr G.N. Bajpai, calls the "three i's''— investors, issuers and intermediaries.

Currently on a three-day visit to the city, Mr Bajpai has particularly underlined the role that industry organisations can play in the context of development of the capital market. "Information is fast emerging as the most important tool that investors can lay their hands on'', he told Business Line in an interview.

Excerpts.

What are SEBI's priorities in the area of investor protection?

Experience has taught us that investors often tend to make themselves susceptible to risks, both event-related as well as ones that occur because of lack of knowledge or clarity. While we cannot do much about the first, a lot can be done about the second. Our experience is serving as a foundation for all our initiatives towards safeguarding investors, especially the small ones as they are more risk-prone.

We must ensure that investors have a hassle-free ride when they interact with intermediaries such as DPs. No technical hitch at their end should hold up business for long. Compliance by market participants is a major issue for us. Regulations on aspects like compulsory disclosure of information must be met without fail.

All this taken together is a tall order... we understand that well. However, considerable progress has been made already. Our latest data filing and retrieval system, for instance, will be an effective way of capturing corporate information. The proposed central listing authority will also provide a key service.

What is the latest on that ageless issue, prevention of insider trading?

Well, we are always vigilant. A number of checks and balances to identify instances of insider trading are currently in place. We need to sustain these and also find out ways of improving the existing system.

While stories on insider trading are constantly doing the rounds, the regulator takes a view when it comes to specific cases. Here the media and investor organisations have a role; they can point out what's really happening on the stock exchanges.

How will you now relate to the Department of Company Affairs, which is moving over to the Finance Ministry?

We have had a good working relationship and the DCA-SEBI co-ordination will continue. We have many interests in common and its transfer will not affect anything. In future, particularly in a situation where the regulatory message has spread further, better ways of co-ordination will be evolved.

Will the present buyback trends continue?

The market will decide that, but going by some of the latest figures it seems that these will keep on happening. My reading is that companies will still see buybacks an important source of consolidation. In the days to come, SEBI will continue to maintain a strict watch on this front.

The idea is to ensure that all norms are being followed by companies carrying out buyback programmes and that the interest of investors is not jeopardised.

It is felt SEBI sometimes tends to over-regulate the market. Your comments.

That is a perception that does not seem to go away. And recent happenings in the corporate sector, both here and abroad, might just give it a new strength.

The regulator has to be a step ahead of the operator, a need that everybody in the market must appreciate.

What the operator considers `over-regulation' is most likely seen as `wisdom' and `caution' by the other side. Let me add that our regulatory strengths are defined by statute and we have to operate within legal limits.

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