The Supreme Court instructed the Centre and the Securities and Exchange Board of India (SEBI) to submit a report on the regulatory regime and steps taken in the aftermath of the Hindenburg-Adani issue, setting Monday as the day for hearing the case.
“Will want to know about the existing regulatory mechanism and the steps being taken. The regulatory mechanism needs to be duly strengthened. There is a need to strengthen a robust regulatory framework in the interest of the investors and stable development of the security market,” the court told Solicitor General Tushar Mehta.
The court has urged the government and SEBI to provide information by Monday on the causes of the market crash following the Hindenburg Research report, as well as suggestions on how the regulatory system may be reinforced to prevent such an event in the future.
The court directed Mehta to submit the note after consulting with the government and SEBI on the best course of action and even advocated forming an expert committee to make necessary changes to the legislative and regulatory framework governing security markets.
“Whatever we say may affect market sentiments and investor confidence,” the court expressed caution.
The bench stated that because there is seamless money movement and growing middle class investment in the stock market, a strong system must be put in place to protect investors.
“The point that really bothers us is how do we protect the interest of the Indian investors,” the bench said.
“Can we contemplate an expert committee that can give inputs for modifying the statutory regulations so that it doesn’t happen again?” the apex court questioned SEBI.
