Corporatisation Issue To Be Taken Up At Sebi Meet

The main item on the agenda for the Securities and Exchange Board of India's (Sebi) board meeting, scheduled for January 29, is corporatisation and demutualisation of the exchanges, with hearings on Shankar Sharma and Rakesh Mehta being the other remaining items.

With D R Mehta's extended term as Sebi chairman scheduled to end in February this year, all pending issues which originated during his tenure are being disposed off before his term ends.

The regulator is expected to give the final verdict as to what the corporate structure of the exchanges will be in a corporatised and demutualised environment. This issue has been pending for a long time now and the Union finance ministry has been pushing for it since the market crisis in March last year. The larger issues of the exact holding structure of the exchanges and the composition of their board, especially with regard to broker representation, are still to be sorted out.

At the last Sebi board meeting held on December 28 last year, the board had decided that there would be no Sebi nominees on the exchanges board. The regulator also sent out a directive to all the exchanges directing them to amend their bye-laws within two months so that no broker holds office as president, vice-president or any other positions as office-bearers.

The hearing on Rakesh Mehta of Rennaisance Securities was left incomplete at the last board meet due to lack of time. This hearing is expected to be completed this time around. Mehta was implicated in the Cyberspace fiasco.

Shankar Sharma, the promoter of First Global group of companies, is also to be heard by the Sebi board. Sharma's appeal against the Sebi order barring his firms from taking up any capital market-related activity is still pending with the Securities Appellate Tribunal. The tribunal has given the regulator two extensions in order to conduct the hearings and settle the issue.