The Securities and Exchange Board of India (SEBI) is trying to resolve issues that are delaying the initial public offering of the National Stock Exchange (NSE), chairman Tuhin Kanta Pandey said on Thursday. He added that SEBI will not let commercial interest supersede general public interest while deciding on the public issue of the country’s largest exchange.
“It is an ongoing discussion, the exchanges are also first-line regulators,” Pandey told reporters on the sidelines of the 18th CII Corporate Governance Summit.
Pandey said India has adopted a model where commercial or for-profit entities have become exchanges, and made it clear that it is the regulator’s job to ensure that the interest of the general public is not compromised.
In 2016, the NSE had first applied for listing. It did not happen as the exchange was in the eye of the storm after 2015’s co-location case that involved allegations of illegal use of NSE’s co-location facility by brokers to gain an unfair advantage in trading. In 2019, the regulator fined the stock exchange Rs 1,100 crore. SEBI later closed the case against the NSE and its former officials, finding no evidence of collusion.
Last year, there were reports that the NSE had restarted the process of its public offer and applied for a “no-objection” certificate from the regulator. SEBI has constituted an internal committee to look into the IPO, and has asked the exchange to resolve all the issues. SEBI’s concerns reportedly include NSE’s internal processes, governance and the majority ownership in Clearing Corporation.
In his speech, Pandey also highlighted the importance of corporate governance and the need for self-regulation. “SEBI will continue to expect higher bar on governance, but true and lasting change must come from within the corporate boardrooms and cultures.”
“We need to move from thinking of minimum compliance to maximum governance,” Pandey said, adding that boards must rise above routine and ask difficult questions, and auditors and independent directors must act as gatekeepers of integrity.