The Securities and Exchange Board of India is working hard to ensure that the savings of small investors are not compromised following the chit fund scams that have shaken investors’ confidence across the country, Chairman U. K. Sinha said here on Wednesday.
Mr. Sinha, however, said SEBI had some legal limitations. He would not be able to comment on specific issues concerning specific companies as there had been some court and quasi-judicial orders as well in certain cases, he added.
“I will, however, like to assure you all that we are alive to the task given to us… within the mandate given to us we are trying to do our best,” he said.
Mr. Sinha was speaking at a seminar of the Asia Pacific Region Committee of the International Organization of Securities Commissions, a global body of securities regulators from across the world of which SEBI is a member.
The market regulator has passed an order against Saradha Realty India to close all its collective schemes and refund the money collected from investors within three months. The regulator has also barred Saradha Realty India and its Managing Director Sudipta Sen from the securities markets till the time it winds up all its CIS and refunds the entire money to investors.
On the regulatory improvements, he said, “… As and when new problems and challenges come forth, the government and Parliament make improvements (to the regulations). I think the time to improve and further strengthen them has come.”
He said there should be a single regulator for regulating the entire collective investment scheme (CIS).
“Our position is that ideally there should be one single regulator for the entire collective investment scheme and all the schemes such as nidhi funds or schemes such as chit funds… Let there be one single regulator in the country in charge of everything because this regulator will have a serious task at hand,” he said.
At present, chit funds are regulated by the States while the Corporate Affairs Ministry regulates nidhi funds.
Meanwhile, the capital market regulator has suggested to the government some changes that it believes should be made to the SEBI Act.