Govt initiates process for Sebi chief appointment

The ministry of finance has initiated the process for the appointment of a new chairman of the Securities and Exchange Board of India (Sebi). The tenure of the current chairman, U K Sinha, ends in February next year.

According to sources, the government constituted a committee headed by the cabinet secretary, which may invite applications for the top post from the private sector as well.

This would be the one of the first instances that the government is mulling to consider individuals from the private sector for the post of the market regulator. The government had recently started considering applications from the private sector for top posts in public sector banks .

Sinha, a Bihar cadre IAS officer, was appointed the chief of the key regulator in February 2011, succeeding C B Bhave. He was appointed for a period of three years and then subsequently was awarded an extension two years. He was the chairman and managing director (CMD) of the Unit Trust of India Asset Management Company (UTI AMC), prior to his appointment as Sebi chief.

Sinha’s term at the regulator is categorsied with overhauling policy changes for the markets. Under his tenure, Sebi repealed more than two-decade-old insider trading rules and replaced them with a new code and put forward new corporate governance norms and gave voice to minority shareholders.

Sebi was also in the headlines due to the ongoing tussle with the corporate entity, the Sahara group.

Bhave’s tenure was marked with regulatory actions against malpractices and abolishment of entry load in mutual funds.

He was Sebi’s executive director from 1992 to 1996. After that, he became CMD of the then newly created National Securities Depository Limited (NSDL) and then joined Sebi for a period of three years.

Most of the previous Sebi chiefs, with the exception of G N  Bajpai, have come from the bureaucracy or the Industrial Development Bank of India (IDBI). M Damodaran had been with both. After G V  Ramakrishna and D R  Mehta, he was the third IAS officer to become the Sebi chairman. He was also the third Sebi chairman coming from IDBI (S A Dave and S S  Nadkarni were the other two).