Regulation of SEBI

Context:

This regulation of SEBI to the effect that public consultation must be made on the amendment of regulations is a very important step towards creating transparency and getting investor participation in favour of policymaking.

Major Aspects of SEBI’s Directive

• Public Participation on Rulemaking
  • Any proposed amendment to SEBI regulations must be open for public consultation.
    Accompanying this will be the draft of policy changes along with the clear intent and objectives.
• Enhanced Transparency and Accountability
  • Seeking feedback from investors, market participants, and other stakeholders ensures inclusive decision-making.
  • This avoids arbitrary rulings from arbitrary amendments and provides the opportunity for discussion throughout the industry prior to implementation.
• Gazette Notification dated 17 February
  • This requirement has now been put into black and white by SEBI in a Gazette notification and stands now as a policy directive in law.

Implications of This Move

• More confidence in investors: Market participants will have a say in regulatory changes.
• Better compliance: Companies and investors are better prepared for rule changes.
• Improved policy effectiveness: Regulations will fit more with real-world requirements.

The move sits within the global best practices as regulators in many other jurisdictions involve public consultation prior to the amendment of reg