SEBI to revise regulations and create master circulars

Securities and Exchange Board of India (SEBI) issues various circulars to market participants giving its views and mandates to various participants. It is proposed to compress all the circulars issued by SEBI into Master Circulars - this would be done subject by subject. For example, there would be only one Master Circular on Mutual Funds. The proposed Master Circulars would enable SEBI’s entire policy structure read with the Rules and Regulations of SEBI to be found in one place. This would help in minimising unintended or technical violation of circulars.

As our regulations and circulars have been accretive in nature, with the advent of time our circulars have become bulky and diffused. Some may even be unnecessary as the market structure has changed very rapidly over the past few years. SEBI is therefore looking at revising not merely the form, but also the content of the circulars.

In addition, SEBI would also like to review all its Regulations so that they are alive to the current market structure and address regulatory concerns adequately. This process of checking for relevance and updation in the substantive regulation would run parallel to the creation of Master Circulars in the same area so that the two efforts can be coordinated.

SEBI would like to move towards use of plain English in its regulations so that the regulations are comprehensible and easy to follow.

Given the ambitious nature of the project, it is estimated to take over a year and three months to complete. In this project, besides the relevant departments of SEBI, the National Law School of India University, Bangalore has agreed to be the partner school. National University of Juridical Sciences, Calcutta will also participate in the project subsequently. A senior securities lawyer will give his inputs on an honorary basis. A former Judge of the Supreme Court of India will give his guidance in important areas of securities law jurisprudence.

After the work and brainstorming amongst SEBI, law schools and experts the draft of one area of regulations, would be put on SEBI’s website for public comments and work will simultaneously begin on the next area. The areas and time schedules which are proposed will be separately hosted on the SEBI website in due course, so public can offer their comments on the drafts, considering which the final regulations will be drafted. The importance of public comment cannot adequately be emphasized as the success of the task will rest to a large extent on the inputs of investors, market intermediaries and professional experts to the first draft put up on the SEBI website. The first set of draft regulations and Master Circulars can be expected to be hosted on the SEBI website in the month of May 2007.

Source : Equity Bulls

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