Chief Justice cautions Sebi over Sensex surge

Mumbai: Chief Justice of India DY Chandrachud on Thursday advised market regulator Sebi and the Securities Appellate Tribunal (SAT) to exercise caution amid a significant surge in equity markets and pitched for more tribunal benches to ensure that the backbone is stable.

Inaugurating the new SAT premises here, CJI Chandrachud pitched for authorities to consider opening up new benches of the SAT given the higher workloads because of higher quantum of transactions and newer regulations.

Referring to newspaper articles calling the crossing of the 80,000 points milestone by the BSE as an ecstatic moment, where India is entering a stratospheric domain, the CJI pointed out that such events emphasize the need for regulatory authorities to ensure that everyone holds their ‘balance and nerves’ amid the wins.

“The more you see the surge in the stock market, the greater the role, I believe, for Sebi and SAT, as institutions which will exercise caution, celebrate the successes, but at the same time, ensure that the backbone is stable,” the CJI said.

He added that Sebi and appellate fora like SAT assume ‘immense national importance’ in fostering a stable and predictable investment environment and explained how this can benefit in economic growth for the country.

“When investors feel assured that their investments are protected by law and that there are effective mechanisms for dispute resolution, they are more likely to invest in the country’s markets. This influx of investment can lead to better economic outcomes such as increased capital formation, job creation and overall economic growth,” the CJI said.

The role of SAT in the ‘dog eat dog’ world of finance is that of a referee in ensuring that everybody plays by the rules, he said, stressing on the need to be updated by keeping pace with new developments.

With the rapid growth in the number of market participants and transaction volumes, there is a likelihood of an increase in disputes and may be even instances of regulatory non-compliance, he said. In addition, issues like market conduct and corporate governance have increased appeals filed with SAT ‘manifold’, the CJI said, pitching for an early filling up of the vacancies at SAT to ensure that the tribunal functions effectively and at full capacity.

CJI Chandrachud, who called the event as a ‘homecoming’ because he had appeared in the tribunal first as a lawyer, also pitched for more SAT benches pointing out that the statutes allows for it.

He later told reporters that creating additional benches is a ‘policy issue’ and he has flagged the issue as the Chief Justice of India given the growth in the work.