The Securities and Exchange Board of India Chairman G N Bajpai on Friday said the market regulator would not wait for the enactment of the Companies Amendment Bill to issue the revised Clause 49 on corporate governance.

"While there is some re-thinking on the legislative front, Sebi will go ahead and address the dynamic issues relating to corporate governance through regulations. The N R Narayana Murthy Committee has already heard the industry chambers' representations. The modified Clause 49 will be taken up by the Sebi board soon," Bajpai told reporters on the sidelines of an international conference on redefining the accountancy profession organised by the ICAI.

Amendments to Clause 49 had been stalled after protests from industry and the Murthy Committee was asked to have a relook at some of the controversial proposals.

The amendments aimed at strengthening the responsibilities of audit committees, improving the quality of financial disclosures, including those related to related party transactions and proceeds from initial public offerings, requiring boards to adopt formal code of conduct, whistle blower policy and improving disclosures related to compensation paid to non-executive directors.

All listed entities, having a paid-up share capital of Rs 3 crore (Rs 30 million) and above or net worth of Rs 25 crore (Rs 250 million) or more at any time in the history of the entity, were required to comply with the requirements of revised Clause 49.

The earlier amendments had also stated that non-executive directors cannot have board representation for more than nine years.

Among the norms in the amended Clause 49 that had got the corporate sector's goat was the one that envisaged that if a holding company is required to have 50 per cent independent directors, the same requirement would have to be complied with by the subsidiary company irrespective of its size and nature of business.

When asked about the recent pounding of shares of public sector undertaking in the stock markets, Bajpai said, "Sebi is on high alert. We are keeping a close watch."

The market regulator has also commenced work on finalising the regulations for Indian Depository Receipts.

"IDRs will completely globalise the Indian market. The companies that will tap the IDR route will be determined by the efficiency of the Indian markets, cost effectiveness of raising capital and India and participation by the market players," Bajpai said.

IDRs, as per a notification of the department of company affairs, can be issued only by global companies with a pre-issue paid up capital of at least $100 million and with an average turnover of $500 million during the previous three financial years.

Contrarian fund proposal with govt

Sebi Chairman G N Bajpai said the regulator had sometime back mooted the setting up of a contrarian fund that could be a counter balance to the huge foreign institutional investors fund inflow into the Indian markets.

"Such an attempt was made in Hong Kong. Some voice was raised about the need for adequate balance in the Indian markets too," he said, adding that it was for the government or the finance ministry to take a final call.

Sebi never volunteered to manage the contrarian fund should it be set up, Bajpai said. It was for the government to decide the modalities of such a fund and its operationalising.