MUMBAI: The government has started scouting for a new chairman for the Securities and Exchange Board of India (Sebi), before Ajay Tyagi’s three-year term at the helm of the regulator ends on 31 March.
The chairman will be appointed on the recommendation of the Financial Sector Regulatory Appointments Committee (FSRAC), a government advertisement said. The committee is also free to recommend a candidate on the basis of merit even if he or she has not applied for the post. The new chairman will have a tenure of five years.
Tyagi took charge as Sebi chairman on 1 March 2017 at the end of predecessor U.K. Sinha’s term. Tyagi, who was appointed for three years, is eligible for reappointment for two more years.
Tyagi’s three-year tenure was marked with swift action on many high-profile investigation cases, including alleged fraudulent trading by Reliance Industries Ltd, alleged unfair access of select brokers to National Stock Exchange of India’s co-location platform, and the nine-year-long case of alleged malpractice by PricewaterhouseCoopers in the ₹7,136 crore Satyam Computer Services Ltd scam. Sebi also passed orders against brokers of the National Spot Exchange Ltd, besides Karvy Stock Broking Ltd.
Tyagi moved quickly on policy changes as well, revamping regulations on insider trading, foreign portfolio investors, portfolio management, corporate governance, and the takeover code. These also included a major crackdown in terms of policy changes for debt funds and rating agencies.
One major policy initiative still pending is allowing Indian companies to list overseas without a simultaneous India listing. This awaits ministry approval and hinges on whether or not the rupee is made fully convertible. Sebi also needs to rationalize margins that it levies on brokers. The margins are considered to be much higher compared to global counterparts. The market regulator also needs to come out with a policy framework on social stock exchanges. The regulator is also yet to finalize its proposal on mandatory benchmarking of alternate investment funds.
Sebi is yet to finish its probe into the case of alleged malpractices in Sun Pharmaceutical Industries Ltd and Infosys Ltd, facing charges of poor governance and inadequate disclosures. The regulator also has to issue a final order in the case of broker malpractices by Karvy and final orders on insider information being leaked on WhatsApp groups.