How Sebi's new consultation framework caused a flutter
Mumbai: Papers, panels and discussions - India's stock market watchdog typically follows a voluntary system of stakeholder consultations before making key decisions. A provision in the new framework that empowers Sebi's chairperson to skip the consultation process and act swiftly during emergencies may make the process less transparent, while the procedures proposed to amend existing rules will foster greater confidence in the regulatory process, lawyers said. Currently, the Securities and Exchange Board of India turns to committees with diverse stakeholders to discuss proposed regulations, publish consultation papers for public comment and upload agenda papers after board decisions. “To balance urgency with public input, Sebi could adopt measures such as pre-consultation with relevant stakeholders, use technology for swift feedback and publish reasons for expedited actions," Jhunjhunwala said. “This flexibility is beneficial, as it provides Sebi with the necessary leeway to prepare regulations in urgent circumstances, particularly when any delay due to the consultation process would defeat the purpose of the proposed regulation."
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