Urges Industry to understand the intention behind new disclosure and governance norms / Its time Industry takes steps to strengthen Capital Markets
Corporates should run their own Pension Funds for their non-EPFO category employees and invest funds in the equity market, urged U K Sinha, Chairman, Securities & Exchange Board of India (SEBI) while speaking at CII's 5th Capital Markets Summit. Sinha suggested that this would make reliable, long-term capital available for investment. He further explained that it is not easy for the Government to make drastic changes and requested industry to come forward and take steps to improve market depth.While acknowledging regulatory hurdles to IPOs, Chairman also pointed out that reluctance on part of companies to comply with prescribed governance norms is equally responsible for the lack-lustre IPO market. He advised companies not to push back but project best practices to attract domestic and international investors.
Sinha announced that SEBI is adopting measures to ensure that filing of information just once with SEBI would be adequate compliance through Annual Information Memorandum. This should be operational within three months. On adoption of other facilitative initiatives, Mr Sinha announced that KYC across the Financial Sector would be integrated with the co-operation of all other financial sector Regulators.
Sinha also announced that revised ESOP Guidelines which would soon be issued by SEBI would be progressive and would resolve existing anomalies. He also mentioned that minimum public shareholding norms would be made neutral vis-vis ownership.
Speaking at the summit Nimesh Kampani, Chairman, CII National Committee on Capital Markets & Chairman, JM Financial Group suggested some exclusive tax benefits be offered on mutual fund investments, instead of clubbing them under 80C. Tax exemptions that will help channelize savings into the system as well as providing long term funds should be granted.
He further added whether Investor awareness, financial literacy could be one of the constituents of the mandatory CSR that the companies now have to undertake under the Companies Act.
Chitra Ramakrishna, Managing Director & CEO, National Stock Exchange, upheld the recent Corporate Governance rules as the next stage of governance model which will help instil confidence amongst investors and said that CII and the exchanges could work together to implement the new Corporate Governance norms.
Ashish kumar Chauhan, Managing Director & CEO, Bombay Stock Exchange, said FTA framework looks promising and was of the view that India should have Double Taxation Agreements with far-east Countries will help increase foreign retail investor participation, since they have a large Indian Diaspora.
Atul Joshi, Managing Director and CEO, India Ratings & Research suggested that India should consider raising municipal bonds to deepen & widen bond markets in India.
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