In a call to action, market regulator Securities and Exchange Board of India (Sebi) has urged industry stakeholders to proactively report any malpractices within their sectors. This, Sebi chairperson Madhabi Puri Buch emphasized, is crucial to maintaining investor trust—a cornerstone for a growing market.
The Indian stock market has been on a tear lately, with the 30-share BSE Sensex crossing the 80,000 mark for the first time on 3 July—driven by its fastest-ever 10,000-point rally in a record 58 sessions. Amid this surge, Sebi has implemented stricter measures to ensure market integrity, including stringent instructions to regulated entities on collaborations with ‘finfluencers’ and individuals claiming to be investor educators.
This regulatory tightening is part of Sebi’s broader efforts to curb potential market manipulation and ensure transparent operations across the financial ecosystem.
“Trust is the foundation of growth,” Buch said on Thursday at a conference organized by the Association of the Portfolio Managers in India. “If the trust is belied, the edifice of the system will come down like a pack of cards. It is important that everyone, including the regulators, maintain this trust.”
Buch highlighted the critical role of trust from retail, institutional, and foreign investors in fostering market growth. She warned that any erosion of this trust due to industry mischief could lead to more stringent regulations and a potential collapse of the ecosystem.
To prevent such scenarios, Buch called on industry players to report any unethical practices they encounter. “Bring forth to the regulator what mischief is going on in the market to avoid our exploding into the system and coming up with a heavy hand. Good players should come to us about the mischief in their own interest,” she asserted.
At the conference, the chairperson also discussed Sebi’s initiative, the Pilot of Industry Forums project, aimed at gathering ground-level feedback from various industry stakeholders.
She noted that Sebi had received a substantial amount of constructive feedback from a brokers association, which had already filtered out 50 potentially harmful suggestions before presenting their recommendations to Sebi. “That is the maturity shown by the association. That ensures respect for the forum,” she said.
She also urged non-members in the industry to join their respective associations to ensure all voices are represented. “It will make your life easier, it will make compliance easier. The person in the centre, the investor, needs to trust us, only then the industry will grow. We must ensure that the trust at the centre is never broken,” the chairperson concluded.
The chairperson also informed the gathering that the challenges faced by the Indian regulator are distinct from those encountered by other market regulators globally, as she observed during the International Organization of Securities Commissions (IOSCO) meetings.
IOSCO oversees global securities and futures markets.
“The issues they face differ from ours because they lack growth, whereas we are experiencing growth. The problems we encounter today stem from our expansion,” she explained.
