Every regulatory organisation has to reinvent itself and on that front, the Securities and Exchange Board of India (SEBI) has done better than many organisations worldwide, said former SEBI chairman M Damodaran. The head of a corporate governance institute, Excellence Enables Pvt. Ltd, Damodaran was speaking at a two-day conference on corporate governance called Gatekeepers of Governance.

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Damodaran mentioned that private equity firms bring in good practices. When asked if they are good at ensuring good governance, he said, "Private equity firms bring money, and we need money in the country. Companies also need money, and they bring in good practices. However, I'm not entirely sure if it's as much as expected."

Regarding SEBI's FPI disclosure norms, Damodaran said, "Any regulator wants to know who is investing in the market. SEBI has the duty to ensure the market is well-behaved. They need to know whose money is coming in to prevent any tainted money. I think the 50% rule is a good idea because it ensures diversity in investments."

He also added, "Foreign money is not as crucial as before when we had little domestic investment. Today, domestic investors have replaced what went out. Now, what's essential is to attract money to India through well-regulated markets and positive market indicators. If India's market functions well, money will naturally flow in, even when compared to other countries with more significant issues."

The former SEBI chief emphasised the importance of maintaining a well-regulated market to attract investments, both domestic and foreign.

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(Edited by : Ajay Vaishnav)

First Published:Nov 3, 2023 7:44 PM IST