Eight things Sinha should do in next eight quarters

Two issues originated even before his first term started and have continued to fester. The first is the insider trading case against RIL and the second is the Sahara group's illegal money raising issu

Ahead of the launch of Jignesh Shah's newest venture, on February 5, 2013 Street food had said, "Surprise us, Mr Shah." On February 11, 2013, MCX SX had gone live amidst much fanfare without giving any inkling of the nasty surprises the group will pop up five months later.

Managing the outcomes of the National Spot Exchange (NSEL) crisis, in which two listed entities Financial Technologies India Ltd (FTIL) and Multi Commodity Exchange (MCX), and a stock exchange which was promoted by these two listed firms, will be one of the eight items that Street Food is serving on the plate of the chairman of Securities and Exchange Board of India (Sebi), U K Sinha, who has just won a two-year term till 2016.

Sinha will have eight quarters at his disposal and let us give him one quarter or three months, which is reasonable time to address each of these in great detail, and bring these to a logical conclusion. Like the Jignesh-MCX issue, each of these will be complex and require tying up of several loose ends. MCX's board's unprecedented action of restraining the voting rights of FTIL, another listed firm is just one example. Achieving closure that is fair to the small stakeholders is what Sinha should aim at. Now, let us check out the other seven.

Two of these are issues, which originated even before his first term started and have continued to fester. First, is the insider trading case against Reliance Industries, the country's largest listed firm. While there has been speculation and unconfirmed reports about the movements in the case, there has been no official word on it yet.

Second is the Sahara group's illegal money raising issue, which has dragged along in courts for nearly four years now. Unprecedentedly, it has gone back to court rooms after a final order in the Supreme Court in August 2012.

Sebi got the finance ministry to table the Bill on more powers to attack ponzis and illegal money raising after much effort and persuasion. But, the potential targets of these new powers seem to have garnered political support to derail this legislation. Sinha's strategy here will be crucial as eradication of illegal shadow banks is the key to development of the safer, well regulated products such as mutual funds and public offers.

A number of branches have been opened by Sebi in the past couple of years. It should be ensured that these offices are made to contribute meaningfully to the larger machinery of enforcement. They should not be reduced to sleepy outposts.

Organised markets themselves have significant scope for improvement in customer protection. The customer needs to be protected not only from the intermediary but also the stronger players. Even here it is the iron hand with which Sebi will deal with the rich, well-networked manipulators that will turn into a protective shield for the small guy.

The new insider trading regulations and more importantly effective enforcement will be a key tool here. It is important that an example is made out of big boys. The Rajat Guptas and Rajaratnams of Indian markets are out there waiting to be brought to book.

The eighth item is the icing on the cake. Sinha should complete all these by Christmas 2015. Then he will have enough time for reflecting on and celebrating an extraordinary half a decade. Wiser from last year, I'm not asking for any surprises this time.