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Expert panel against regulatory failure

  • Published
    3rd Mar, 2023
Context

In response to a report by Hindenburg Research, the Supreme Court established an expert committee to examine the causes and existence, if any, of regulatory failure that resulted in investors losing billions of dollars due to market volatility.

About the committee:
  • The committee's four broad mandates cover everything. Investigate whether there has been a regulatory failure in dealing with the alleged violation of laws protecting the securities market in relation to the Adani Group of companies;
  • Provide an overall assessment of the situation, including the pertinent causal factors that contributed to the volatility in the securities market in the recent past; suggest measures to strengthen Indian investor awareness;
  • Market regulator Securities and Exchange Board of India (SEBI), agencies connected with financial regulations, fiscal agencies, and law enforcement agencies should cooperate with the expert committee.

Securities and Exchange Board of India:

  • SEBI is a statutory body established on April 12, 1992, in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
    • The regulatory body prior to the establishment of SEBI was the Controller of Capital Issues, which received its jurisdiction from the 1947 Capital Issues (Control) Act.
  • Powers & Functions:
    • It is a quasi-legislative and quasi-judicial body which can draft regulations, conduct inquiries, pass rulings and impose penalties.
    • To safeguard Indian investors' interests in the securities industry.
    • To encourage the growth and smooth operation of the securities market.
    • To control the securities market's commercial activities.
    • Providing a platform for individuals such as portfolio managers, bankers, stockbrokers, investment advisers, merchant bankers, registrars, and share transfer agents.
    • To oversee the duties assigned to participants, including foreign portfolio investors, credit rating companies, custodians of assets, and depositors
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