Beware of over-regulation

Regulation of unlisted firms must be rational, not reactive

This newspaper has reported that the Union Ministry of Corporate Affairs (MCA) is considering expanding regulatory control over unlisted companies that are above various thresholds in terms of revenue. The apparent reasons for this move to further regulate large unlisted companies are varied. They include the possibility that some of these companies are large enough to have “systemic” implications. The proposed regulatory framework would require even unlisted companies to submit quarterly financial statements to the MCA, and may have followed some well-publicised failures of large unlisted companies that had been hailed in the press as “unicorns”. It is easy to