Sebi Chief Pandey: Misgovernance Is Individual, Not Systemic
Why in the news
Sebi’s chief commented on recent corporate governance lapses and speculative derivatives trading, arguing against knee-jerk new rules.
Key facts
- Examples cited: Gensol Engineering fraud; front-running by a mutual fund manager.
- Cause: greed and egregious conduct of individuals; adequate guardrails already exist.
- Duty to prevent misconduct lies with boards, independent directors and auditors.
| Theme | Sebi’s stance |
|---|---|
| Regulator’s reach | Cannot watch every boardroom; steps in when public investors are at risk |
| Speed | Timely action, including interim orders, where delay would hurt investors |
| F&O trading | Feedback under review; worry about casino-type trading by younger traders |
| New rules | No tougher rules for isolated incidents; any change should be systemic |
| Enforcement | Timely, exemplary action to create a chilling effect |
F&O view
- F&O are useful for liquidity, price discovery and hedging.
- Heavy speculation in options goes against that purpose.
Exam angle
- Person: Tuhin Kanta Pandey, Sebi Chairman.
- Terms: front-running, interim order, price discovery, hedging.