Of course, the introduction of the backstop facility-Corporate Debt Market Development Fund-that will purchase investment-grade corporate debt securities in times of stress may raise some eyebrows because of the argument that the government, which will provide 90% of the `33,000 crore fund, should not be protecting risk-taking investors. The regulator seems to be doing its job in earnest by being on a high-alert mode and letting every participant know that.Įvaluating Mintzberg’s 10 schools of thoughts for strategy formulation In the past few months, it has actively gone after fund houses for cases of front-running.

In fact, Sebi chairperson Madhabi Puri Buch’s sharp remarks that ‘…If another Karvy-like instance happens, it will be on our dead bodies…,’ gives an indication of how the regulator is looking to crack down on malpractices by certain market participants. The Asba-like mechanism in secondary trade-similar to initial public offers-ensures that brokers are unable to misuse clients’ money while the investor continues to earn interest income on the blocked amount. For example, the removal of permanence of board seats gives shareholders a larger say in deciding on the tenure of board members and gives the Nomination and Remuneration committees more teeth. Some of these measures will surely improve corporate governance. However, this is a good time to take the bull by the horns that explains Wednesday’s slew of measures such as introduction of an Asba-like mechanism for secondary trades, removal of permanent positions in board seats, allowing private equity firms to become mutual fund sponsors, a backstop facility to help MFs during stress, and the new Environment Social and Governance (ESG) norms. The Securities and Exchange Board of India’s (Sebi’s) latest reforms measures-16 of them-come at a time when the stock markets are on the edge.

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