Sebi embarks on simplification of regulations but more needs to be done

livemint.com:

Law must be forged on the anvil of foresight, but even the farthest foresight cannot prevent it from being laden with gaps and ambiguities that may be exploited by the unscrupulous. This is the reason why lawmakers often have to engage in the process of revamping laws. However, in the pursuit of making the laws foolproof, sometimes laws can become a tad too complicated or burdensome on those governed by them. Hence, lawmakers must regularly assess the practicability of the norms laid down and consider toning them down, wherever necessary.

Facing the burden and stigma of non-compliance would be an unjust consequence for those who intend to follow the law but are unable to do so owing to its excessively onerous or ambiguous nature. Any such revamping or toning down of laws, especially those in the nature of regulatory frameworks, must be done after consulting with the stakeholders and the public in order for it to have the intended effect.

The budget speech for FY2023-24 rightly put forth the proposal to simplify and ease compliance in the financial sector by carrying out a comprehensive review of the regulatory frameworks after consultation with the public and regulated entities. Pursuant to this, market regulator Sebi issued a press release on 4 October inviting suggestions from stakeholders towards simplifying the framework under 25 regulations dealing with listing, takeover and those governing intermediaries and market infrastructure institutions. Surprisingly, the regulations on prohibition of insider trading do not find a place here despite the May consultation paper revisiting the definition of unpublished price sensitive information awaiting action. Sebi has formed 16 working groups under the standing advisory