Chief Justice of India (CJI) DY Chandrachud advised the Securities and Exchange Board of India (SEBI) and the Securities Appellate Tribunal (SAT) to exercise caution amid a significant surge in equity markets and suggested the establishment of more tribunal benches to ensure stability.
This advice came during the inauguration of the new SAT premises, where CJI Chandrachud highlighted the increasing workload due to higher transaction volumes and new regulations, necessitating more SAT benches.
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CJI Chandrachud referenced the recent crossing of the 80,000-point milestone by the Bombay Stock Exchange, which has been described as a significant moment for India. He emphasised that such market surges increase the responsibility of regulatory bodies like SEBI and SAT to maintain balance and stability.
‘Ensure backbone is stable’
“The more you see the surge in the stock market, the greater the role, I believe, for SEBI and SAT, as institutions which will exercise caution, celebrate the successes but at the same time, ensure that the backbone is stable,” he stated.
He also highlighted the importance of SEBI and SAT in fostering a stable and predictable investment environment, which he noted can lead to better economic outcomes such as increased capital formation, job creation, and overall economic growth.
‘Dog eat dog’
“The role of SAT in the ‘dog eat dog’ world of finance is that of a referee in ensuring that everybody plays by the rules,” CJI Chandrachud said, stressing the need for these institutions to stay updated with new developments.
With the rapid growth in market participants and transaction volumes, there is an increased likelihood of disputes and instances of regulatory non-compliance. Issues like market conduct and corporate governance have led to a significant rise in appeals filed with SAT. To address this, CJI Chandrachud advocated for an early filling of vacancies at SAT to ensure it functions effectively and at full capacity.
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CJI Chandrachud, who described the event as a “homecoming” due to his past appearances in the tribunal as a lawyer, also called for more SAT benches, noting that the statutes allow for it. He later remarked to reporters that creating additional benches is a policy issue that should be considered by decision-makers.
Justice PS Dinesh Kumar, SAT’s presiding officer, noted that there are currently 1,028 pending appeals in the SAT, which has disposed of over 6,700 appeals since its inception in 1997.
On timely actions and corrections
CJI Chandrachud underscored the importance of timely actions and corrections in the financial sphere, citing a recent 5-bench judgment on a critical matter that was delivered within a month of the original order.
He also discussed the considerations during the selection of the SAT head, pointing out that there is a perception at the highest level of government that SAT is a key tribunal in economic regulation. Therefore, it is necessary to have a person with a robust approach to regulation, even if they do not have a background in securities law.
During the event, CJI Chandrachud launched a new SAT website developed by the National Informatics Centre and stressed the need to focus on technology advancements to reimagine access to justice.
