Mumbai: The National Institute of Securities Markets, or NISM, is working on a plan to conduct workshops on the functioning of securities markets for high court and Supreme Court judges, members of Parliament (MPs) and the Economic Offences Wing of state police forces to help them figure out an increasingly sophisticated system.
Decoding the markets: The Bombay Stock Exchange building. The NISM is in discussion with judges and MPs on the educational initiative. Abhijit Bhatlekar / Mint
NISM is a public trust set up by markets regulator Securities and Exchange Board of India, or Sebi, and is an autonomous body that works on improving market quality through educational initiatives.
“NISM is engaging a large number of constituencies critical to market development— the media, judiciary and elected representatives—and is intending to come up with a number of initiatives such as workshops and symposia to share perspectives about securities market,” said a senior NISM official. He did not want to be identified because the discussions with judges and MPs are still on.
“This initiative will help them appreciate the securities market,” he said of the effort.
Currently, there are 542 members in the Lok Sabha. According to data compiled by PRS Legislative Research, a Delhi-based research organization that tracks parliamentary activity, an average 69% of MPs attended the Lok Sabha in 2008.
“Sixteen out of 36 Bills, excluding finance and appropriation Bills, were passed by Lok Sabha in less than 20 minutes, most of these without any debate. These include the Information Technology (Amendment) Bill, the Code of Criminal Procedure (Amendment) Bill, the Gram Nyayalayas Bill and Prevention of Corruption (Amendment) Bill,” the research report said. Gram nyayalaya literally means village court.
Milind Deora, Congress party MP who represents South Bombay, which houses a number of corporate headquarters, including financial services firms and brokerages, welcomed the move.
“It is a very good initiative to educate and expose MPs to the regulatory framework of securities markets so that we parliamentarians can help strengthen the Indian markets by making laws that are broadbased and investor-friendly. Some may disagree but the fact is stock markets still do influence the country’s economy,” he said.
Prakash Javadekar, who is the official spokesperson for the main opposition Bharatiya Janata Party and a Rajya Sabha MP from Maharashtra, also said the NISM move would help MPs understand the current economic situation.
“All decision makers need to be sensitized in all such new areas, emerging markets and the current economic scenario in India and abroad,” said Javadekar, whose party has for long had a strong base in trading communities.
However, Basudeb Acharia, who represents the Communist Party of India (Marxist) in the Lok Sabha from Bankura constituency in West Bengal disagreed with the idea of such workshops, saying MPs do not need any training to understand capital markets.
“I don’t know how MPs will benefit from such workshops. We can find all the information on the movement of market on the Internet and there is no need for workshops,” he told Mint. “Besides, I don’t know if MPs will have time to attend such workshops because a majority of them get busy with their constituency.”
NISM has also tied up with the National Judicial Academy in Bhopal for conducting workshops for sitting judges, a move welcome by corporate law attorneys, some of whom said it would bring efficiency to the judicial process.
Nitin Potdar, senior corporate lawyer and partner of J Sagar Associates, said: “This is certainly a welcome step by NISM as securities laws is a new and specialized branch of law which needs to be understood by not only the market players, but also by lawyers and the judiciary.”
According to him, well-informed lawyers and judges will add efficiency in the judicial process. “Courts in India are already overburdened with routine cases and, hence, speed in deciding issues concerning the markets would be key to its further growth and success,” he said.
Potdar also said NISM should consider publishing regular updates on jurisprudence developed through various decisions given by Sebi, the Securities Appellate Tribunal (SAT) and the courts in India that will assist market players in their business operations.
“This is a very good initiative because, ultimately, for specialized matters you need specialized training, and if lawyers, judges and the entire system…have the opportunity to derive securities markets knowledge from people who are in the market, then it is a step in the right direction and a progressive way to look at it,” said Akil Hirani, managing partner of Mumbi-based international corporate law firm Majmudar and Co.