The Securities and Exchange Board of India (Sebi) is expected to come out with a rating instrument on corporate governance based on the parameters of wealth creation, management and distribution in a couple of months.
It has asked rating agencies Crisil and Icra separately to develop such an instrument to measure the corporate governance on those parameters.
G N Bajpai, the chairman of Sebi, said the attempt was being made for the first time since no where else in the world such an instrument has been evolved.
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"The present system of corporate governance is to have enough number of independent directors on the board and to have audit committees. This is only the form. We should move from this kind of corporate governance to ethical governance. Professionals are high priests in this ritual", Bajpai said.
The Sebi chairman has indicated that the implementation of T+1 trading cycle could be advanced from the scheduled time frame of latter half of 2004, if certain milestones are achieved.
"We could migrate to T+3 settlement with 100 per cent compulsory rolling settlement and also abolish no delivery system within a short span without hiccups. If we could achieve T+1 cycle, straight through processing (STP) and real time gross settlement (RTGS), we will move to T+1 system earlier than envisaged", Bajpai said.
Commenting on the fate of regional stock exchanges, he said that justice Kania report on this was submitted to Sebi yesterday. Sebi has set a time frame of four weeks to seek opinions and suggestion on the report, which has been put on website, before referring it to its board for a decision, Bajpai said.
Stressing the need ethical corporate governance, Bajpai said that there were empirical evidences to show that a good corporate governance company is a preferred destination of investors. Efficacious securities market and good corporate governance are two pillar stones of liberalised corporate world, he said.