CJI Chandrachud advises SEBI, SAT to be cautious, pitches for more tribunal benches

Chief Justice of India D.Y. Chandrachud on Thursday said that regulators like SEBI and appellate forums like the Securities Appellate Tribunal (SAT) need to exercise caution when there is a surge in the stock market as they assume immense national importance in fostering a stable and predictable investment environment.

Inaugurating the new appellate tribunal premises in Mumbai, the CJI Chandrachud said: “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 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. 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,” the CJI said.

Calling the crossing of the 80,000 points milestone by the BSE as an ecstatic moment, where India is entering a "stratospheric domain", Chandrachud said such events emphasise the importance of regulatory authorities. “It tells us that we are into heavy winds,” he said, adding that “it is equally important for others to hold their balance and nerves at such times. Lawyers and judges have a very vital role to play in the overall regulatory domain which covers the securities market.”

The chief justice said 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,” he said while pitching for more benches of the SAT and improved infrastructure to manage its mounting caseload.

Chandrachud said the rapid growth in the number of market participants and the increase in the volume of financial transactions brings with it the likelihood of an increased number of disputes on regulatory non-compliance, market conduct, corporate governance, and shareholders.

While launching new website of the SAT, he stressed on the need to devote adequate attention to the issue of technology. With the advancements in the digital arena, there is a need to reimagine the concept of access to justice, he added.