More The Surges In Stock Market, Greater The Role Of SEBI & SAT In Ensuring Stability: CJI DY Chandrachud

Chief Justice of India DY Chandrachud highlighted the crucial role of the Securities and Exchange Board of India (SEBI) and the Securities Appellate Tribunal (SAT) amidst surges in the stock market. Speaking at the inauguration of SAT's new premises and website in Mumbai on Thursday, CJI Chandrachud emphasized the need for SEBI and SAT to exercise caution and ensure stability while celebrating market successes.

"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," CJI said.

He stressed that a legal system with adequate procedural safeguards, fairness, and justice without arbitrariness is key to building investor confidence, which in turn leads to better economic outcomes. The CJI pointed out that when investors feel their investments are protected by law and there are effective dispute resolution mechanisms, they are more likely to invest, fostering capital formation, job creation, and economic growth.

He reminded that regulators like SEBI and appellate fora like SAT assume immense national importance in fostering a stable and predictable investor environment.

"The Securities Appellate Tribunal (SAT) is like a referee, ensuring that in the 'dog-eat-dog' world of finance, all stakeholders play by the rules. Just like any good referee, the SAT has successfully kept pace with the evolving game. As our markets and businesses become more complex and new regulations flood in, the tribunal must consistently rise to the challenge," CJI said.

In view of the increased importance of the SAT, CJI said that there is a pressing need to fill up the vacancies arising in the tribunal. The need to set up regional benches of SAT in other parts of the countries is also arising.

"The appeals filed before the SAT have increased manifold. In such a scenario, the vacancies in the SAT must be filled at the earliest to allow the tribunal to work effectively and at full capacity. In fact, the SEBI Act also allows for the setting up of benches of the SAT. It may be worth giving greater thought to the proposals of equipping the tribunal with additional benches and improved infrastructure to manage its escalating caseload."

CJI also lauded the SAT for being in the forefront in adopting technology including virtual hearings and e-filing, both during the COVID-19 pandemic and after it subsided.

With the rapid growth in market participants and the increase in the volume of financial transactions, the challenges of the SAT also increase. He concluded by highlighting the necessity for SAT members to possess a deep understanding of financial matters and a commitment to fair adjudication to maintain market integrity and investor confidence.

"As our markets and businesses become more complex and new regulations flood in, the tribunal must consistently rise to the challenge. To effectively adjudicate the appeals before the tribunal, members require not only a deep understanding of intricate financial matters but most importantly, a strong commitment to fair adjudication and procedural safeguards. This is crucial in maintaining market integrity and investor confidence."