Today(on 4th July),Chief Justice of India D Y Chandrachud stressed caution for SEBI and SAT amid rising equity markets, urging additional tribunal benches to stabilize operations. Inaugurating the new SAT premises, he emphasized the need for expanded capacity to handle increased workload and regulatory challenges effectively.
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MUMBAI: Chief Justice of India D Y Chandrachud today(on 4th July), emphasized the need for the market regulator SEBI (Securities and Exchange Board of India) and the Securities Appellate Tribunal (SAT) to exercise caution amidst a notable surge in equity markets. He advocated for the establishment of additional tribunal benches to ensure that the “backbone is stable.”
While inaugurating the new SAT premises, CJI Chandrachud highlighted the necessity for authorities to contemplate the opening of new SAT benches in response to the increased workload due to higher transaction volumes and emerging regulations. This expansion, he argued, is essential to manage the growing complexities and ensure effective governance.
Referring to newspaper articles celebrating the BSE (Bombay Stock Exchange) crossing the 80,000 points milestone as an ecstatic moment, marking India’s entry into a “stratospheric domain,” the Chief Justice underscored the importance of regulatory bodies in maintaining stability. He noted that such significant market events require regulatory authorities to maintain their “balance and nerves” amidst the triumphs.
“I believe that as the stock market surges, SEBI and SAT have an even greater role to play. These institutions must exercise caution, celebrate successes, and simultaneously ensure that the backbone remains stable.”
-CJI Chandrachud stated.
He elaborated on the pivotal role that SEBI and appellate bodies like SAT play in fostering a stable and predictable investment environment, which is crucial for economic growth.
“When investors are confident that their investments are legally protected and that effective dispute resolution mechanisms are in place, they are more inclined to invest in the country’s markets. This influx of investment can result in enhanced capital formation, job creation, and overall economic growth.”
-he explained.
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The Chief Justice described the role of SAT in the “dog eat dog” world of finance as akin to a referee, ensuring that all participants adhere to the rules. He stressed the importance of staying updated with new developments to effectively manage the dynamic financial landscape.
With the rapid increase in market participants and transaction volumes, CJI Chandrachud noted the potential rise in disputes and instances of regulatory non-compliance. He emphasized that a proactive approach is needed to address these challenges, ensuring that the regulatory framework adapts to the evolving market conditions.
Chief Justice of India (CJI) D.Y. Chandrachud has highlighted the urgent need to fill vacancies at the Securities Appellate Tribunal (SAT) to ensure it functions effectively and at full capacity. Addressing the increased number of appeals, particularly those related to market conduct and corporate governance, the CJI emphasized that the appeals have surged “manifold.”
Referring to the event as a “homecoming,” CJI Chandrachud recalled his days of appearing before the tribunal as a lawyer. He underscored the necessity of establishing more SAT benches, pointing out that the statutes allow for such an expansion.
He stated-
“This is an aspect that should be considered by those responsible for making these decisions.”
CJI Chandrachud elaborated on this point further while speaking to reporters, describing the creation of additional benches as a “policy issue” that needs to be addressed in light of the growing workload.
He asserted-
“This is a factor that should be considered by those responsible for making these decisions.”
Justice P.S. Dinesh Kumar, the presiding officer of SAT, provided a snapshot of the tribunal’s current workload, mentioning that there are 1,028 pending appeals. Since its inception in 1997, SAT has managed to dispose of over 6,700 appeals.
Emphasizing the importance of timely actions in the financial sector, CJI Chandrachud cited a recent 5-bench judgement on a critical matter that was resolved within a month of the original order.
He said-
“Timely actions and correction of anomalies are crucial in the financial sphere.”
CJI Chandrachud also touched upon the selection process for the head of SAT, indicating that there is a perception at the “highest level of government” about the tribunal’s key role in economic regulation.
He noted-
“Thus, it is essential to have a person who may not necessarily have practiced securities law or presided over securities cases but possesses a fundamental and robust approach to regulation.”
In addition to these observations, CJI Chandrachud launched a new website for SAT, developed by the National Informatics Centre. He stressed the significance of technology in the legal arena, noting-
“With advancements in the digital arena, it is necessary to reimagine the concept of access to justice.”
The launch of the new website is seen as a step towards enhancing the accessibility and efficiency of the tribunal. The CJI reiterated the importance of devoting adequate attention to technological advancements, which are pivotal in reimagining access to justice in the modern era.
