Chief Justice DY Chandrachud's Take on Bull Run: Regulators Need to be Cautious Amidst Surge in Markets

CJI added that SEBI and appellate fora like SAT assume "immense national importance" in fostering a stable and predictable investment environment
Stock Market
Stock Market

Chief Justice of India D Y Chandrachud recently cautioned SEBI and the Securities Appellate Tribunal (SAT) to be vigilant in light of the robust performance of India's equity market.

He also recommended expanding SAT's capacity by creating additional benches to handle the growing workload from increased transaction volumes and new regulations. These comments were made during the inauguration of SAT's new premises.

Referring to newspaper articles calling the crossing of the 80,000 points milestone by the BSE as an ecstatic moment, where India is entering a "stratospheric domain", the CJI pointed out that such events emphasize the need for regulatory authorities to ensure that everyone holds their "balance and nerves" amid the wins.

"The more you see the surge in the stock market, the greater the role, I believe, for SEBI and SAT, as institutions which will exercise caution, celebrate the successes but at the same time, ensure that the backbone is stable," the CJI said.

He added that SEBI and appellate fora like SAT assume "immense national importance" in fostering a stable and predictable investment environment, and explained how this can benefit in economic growth for the country.

"When investors feel assured that their investments are protected by law and that there are effective mechanisms for dispute resolution, they are more likely to invest in the country's markets. This influx of investment can lead to better economic outcomes such as increased capital formation, job creation and overall economic growth," the CJI said.

The role of SAT in the "dog eat dog" world of finance is that of a referee in ensuring that everybody plays by the rules, he said, stressing on the need to be updated by keeping pace with new developments.

With the rapid growth in the number of market participants and transaction volumes, there is a likelihood of an increase in disputes and may be even instances of regulatory non-compliance, he said.

In addition, issues like market conduct and corporate governance have increased appeals filed with SAT "manifold", the CJI said, pitching for an early filling up of the vacancies at SAT to ensure that the tribunal functions effectively and at full capacity.

(With inputs from PTI)

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