MUMBAI, JAN 20: Securities and Exchange Board of India chairman D R Mehta on Monday said the buyback ordinance needs to be further refined. This is the second time the SEBI chairman has called for changes in the share buyback norms as companies have found the norms unworkable.Supporting buy-back in the treasury business, he said, "All over the world buy-back has been permitted for treasury business." However, he did not comment on whether a company should be permitted to issue fresh equity after buyback.When buyback was permitted last year, the SEBI chairman had called for changes as many of the norms were found to be stringent. However, when the buyback ordinance was promulgated early this month, the government changed only the ceiling from 25 per cent of the net worth to 25 per cent of the capital. Many other restrictions like issue of capital, tax computation and share acquisition by promoters are still stringent.Addressing the "Investment Meet - Global India Conference" organised by All IndiaAssociation of Industries, he said the draft revised takeover code would be readied by January end and come into effect in December.On trading in dematerialised form, Mehta said trading in all index scrips will be in demat form by April this year. Nearly 60 per cent of deliveries on the Bombay Stock Exchange and 50 per cent on the National Stock Exchange (NSE) are already in demat, he added, "By the end of the year, 90 per cent of business will be in demat. It will totally eliminate non-delivery."Rapid demat was one reason why FIIs did not flee India during the South-East Asia crisis, he said, attributing the bad state of the market to the high premium charged by companies when free pricing of issues was allowed in 1992. "The market will revive if 30-40 good companies come to the market," he asserted, urging the government to undertake a major part of PSU divestment in domestic market. "At least 20 to 30 per cent should be raised in India." SEBI's aim was to enforce corporate governance "as far aspossible". Making quarterly results was one step in this direction. India was the seventeen in the world and probably the third in Asia to implement this measure, he added.Reserve Bank of India governor Bimal Jalan said non-performing assets, Indian regulations and the banking system were no longer a domestic issue but an international one. "Banking systems today are inter-related. Else how would the problems of Russia affect Brazil?" he asked."The world over, everyone is talking about strengthening their regulatory mechanism.. Tougher prudential and regulatory norms are needed as we move towards more freedom," Jalan said.Dwelling on the current economic crisis, he said unlike the 1973 crisis and 1979 crisis this time there was a "tremendous amount of concentration on the fragility of the banking sector" which is being seen as responsible for the downturn. The Indian scenario was, however, not as severe. India still had a positive growth while most of East Asia and Latin America were sufferingnegative growth. "Our forex reserves today are at their highest level at $ 30 billion," Jalan added.NSE managing director R H Patil spoke on the need for a more active debt market and using secondary market infrastructure for the primary market. "This will bring down the issue cost from 10 per cent to 2 per cent," he said.
