Mumbai, April 17 SEBI Chairman Tuhin Kanta Pandey on Thursday said corporates must ensure high governance standards as any failure can trigger ripple effects across the market economy.
Addressing the CII Corporate Governance Summit here, the market regulator chief said that preventing failures in corporate governance is essential for maintaining financial stability.
He highlighted that the SEBI will continue to expect a higher bar on governance, but true and lasting change must come from within the corporate boardrooms.
Pandey noted that to ensure transparency in the market, the SEBI has specified periodic disclosures of certain information, such as quarterly disclosure of shareholding pattern, compliance with corporate governance requirements, financial results, and the movement of funds.
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The SEBI chief emphasised the need for industry to adopt Reg Tech solutions to improve compliance, reporting, streamlining processes and improving operational efficiency of enterprises.
RegTech solutions help businesses, leverage technology like AI, machine learning, and cloud computing to automate compliance processes, reduce costs, and improve risk management. RegTech tools can identify potential risks, monitor compliance in real-time, and provide early warnings for non-compliance, thus, minimising penalties and reputational damage.
Pandey highlighted that SEBI and the market exchanges are using suit-tech solutions for effective and enhanced supervision.
The use of technology by regulators has been very helpful in detecting early signs of market abuse and non-compliance. Harnessing technological advancements could further reduce the potential blind spots, market misconduct, and instil a culture of continuous compliance amongst regulated entities, he added.
He also said that there was a need for a balance between regulation and ease of doing business.
"We are conscious that over-regulation can stifle growth and innovation. At the same time, too little regulation can also lead to a decline in trust of stakeholders and adversely impact growth. Hence, optimum regulation is required."
The SEBI chief also came out in favour of rationalising regulations by removing clauses that are no longer relevant and reducing overlaps.
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