Investor protection
Hindenburg Research report on Adani: SC asks SEBI to set up mechanism for investor protection in crises
New Delhi: The Supreme Court has asked stock market regulator SEBI to respond by Monday on possible measures that can be taken to protect the interest of Indian investors in crisis situations such as the market crash triggered by US short-seller Hindenburg Research's report on Adani Group, media reports said.
The court asked the Securities Exchange Board of India (SEBI) to elaborate in its response on how a detailed framework can be put in place to avoid crises like this, according to a report in the media.
A bench of Chief Justice of India (CJI) D Y Chandrachud and Justices P S Narasimha and J B Pardiwala asked the market regulator what role could be envisaged for SEBI in the future to shield investors against market losses.
The bench said one of the suggestions is to have some committee with the aim to have a broader thought process so that some inputs can be obtained, adding that it does not want to cast any doubt on SEBI and other regulatory agencies.
The Government can take a call as to whether some modification is required of the statute, or whether a modification for the regulatory framework is required, the bench said.
The court said it doesn’t want to step in beyond a certain stage of the policy while maintaining that a mechanism to avoid a crisis situation that eats into investors’ money doesn't happen in the future.
It suggested a committee comprising experts from the securities area, a former judge, or an international financial law expert.
The court suggested a wider role for SEBI and it can analyse the powers that exist and how they can be improved.
"Today there is seamless capital flow. How do you ensure that investors are protected? Everybody is an investor now, small, medium, or big," the CJI asked Solicitor General Tushar Mehta, appearing for SEBI, the report said.
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