During the holiday season, there was a comprehensive piece in Economic Times (ET) on the events in the National Stock Exchange, on the cusp of a mega IPO. Worth a read. From a policy perspective, these last sentences are important:
The exchange now enjoys a near complete monopoly in stock derivatives trade. It ranked fourth globally on number of trades executed in calendar year 2015.
NSE, as an institution and through its directors, has been a strong advocate of financial liberalisation in India. This blogger is deeply scepitcal of financial liberalisation for its own sake.
Mobis Philipose’ piece in MINT is equally unambiguous and does not mince words:
Since 2015, when the whistle-blower’s allegation became public, NSE has fought it tooth and nail, even dragging Moneylife, a finance magazine, and its editors to court for publishing stories based on the whistle-blower’s letter. As pointed out earlier, a cover-up is far worse than the crime, simply because the former always involves top officials, while the latter could just be the doing of a few bad elements in an organization. Besides, the independent agency’s adverse observations included this: “Due to absence of protocols related to data retention, email and other information for certain former employees of our company was unavailable.” For a critical financial market infrastructure institution, this is unacceptable. …
Their treatment of Moneylife somehow reminded me of ‘Trading Places’ – the movie in which two rich stockbroker-brothers bet a dollar on whether they could turn a janitor into a successful commodities trader. More than their wealth, the casual betting on destroying and making others’ lives was the important part of being rich.
…. It’s also alarming that it’s in this backdrop of a crisis of confidence and credibility that the exchange is going ahead with an IPO. The exchange is in the hunt for a new CEO, and it still doesn’t know what action Sebi will take but found it expedient to file its DRHP within an earlier stated deadline. This reeks of complacency.
If it reeks of complacency, then well, there must be a reason. They probably know that they would get away with, at most, a slap on the wrist. Perhaps. Troubling, if it happens, but would be unsurprising.
In his last paragraph, Mobis also set the bar for SEBI behaviour. Let us wait and see.
In contrast to these two pieces, Andy Mukherjee’s piece that appeared on Dec. 12 almost sounds too soft and polite which, it isn’t. Andy’s is a polished punch.