Compliance should be a low hum in the background: Sebi chief Madhabi Puri Buch

The Securities and Exchange Board of India (Sebi) chairperson, Madhabi Puri Buch, advocated automated and simplified compliance for ease of doing business in her first public appearance on Thursday after Hindenburg Research's conflict-of-interest allegations.

While speaking at the Global Fintech Fest (GFF) in Mumbai, Buch said India's capital markets regulator aimed to make compliances easier so that focus can stay on doing business. 

She said Sebi encourages automated compliance and ease of reporting so that companies can have real-time control over their operations. “If compliances are tangled, business is hard. Real-time controls within organizations and on reporting processes that are automated so that compliance becomes a low hum in the background. This is our ultimate objective."

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Minimal compliance burden

She said for every entity Sebi was regulating, the aim was to cause minimal compliance burden. “It is like each of us is breathing, we do not have to think about breathing. There is an in and an out. The real capability of our entrepreneurs, industrialists and economy is focused on growing the country and delivering services to the citizens. Compliance should be a low hum in the background."

The Sebi chairperson, who delivered the keynote address on the role of fintech in ease of doing business, said ease of doing business consisted of the business itself and the accompanying compliances. 

Regulatory actions against a business, she clarified, depend on whether the business is benefiting investors or if it is something that is not in the investors’ long-term interest.

“If you are doing something that enhances the well-being of a consumer nine out of 10 times, the regulator will say yes. It will put some restrictions and monitor compliance, but it will say yes. But when the innovation treads the line where the investor is being shortchanged; there is opacity; there is lack of concern of what is happening to investor’s money, those with reasonable probabilities, the regulator will say no," she said.

Also Read: Sebi chair Madhabi Buch owns majority in consultancy named in Hindenburg report

AI adoption

Buch clarified that, as a regulator, Sebi was encouraging standardization for low-cost innovation and that it had a dozen projects using artificial intelligence (AI) to speed up approvals and supervision. “The adoption of technology has allowed far more extensive consultations."

For example, the paper on streamlining index derivatives framework received 6,000 comments, she said, adding: “Had we tried to do this manually, we would have died!"

The US-based short-seller Hindenburg Research alleged earlier this month that Sebi was unwilling to act on its January 2023 Adani report because Buch and her husband Dhaval Buch had investments in offshore funds that had links with the Adani Group.

The Sebi chief and her husband denied the allegations, terming them “baseless” and an attempted “character assassination”.

Also Read: Hindenburg flux: Sebi has all information, no conflict, says chairperson Buch