Regulator to spend Rs 280 cr on realty...

Amount is about 8 times higher than that spent in 2011-12

In a major expansion move, market watchdog Securities and Exchange Board of India (Sebi) will spend about Rs 280 crore on buying residential and commercial properties by March 2013. The outlay is nearly eight times the amount it spent in 2011-12 on acquisition of offices and residential premises.

Part of the amount will be spent on buying new flats for its senior executives in Mumbai. The regulator is also planning to buy a new office premise or a plot of land in Mumbai’s commercial business district, Bandra-Kurla Complex (BKC), where it is headquartered.

Among other things, Sebi will renovate its head office, set up offices at five new locations and purchase office space to set up its Northern Regional Office in New Delhi.

It has proposed to open new local offices in cities, including Patna, Chandigarh and Indore. The move is part of Sebi’s objective to provide services at investors’ doorsteps to develop a balanced pan-India securities market.

REGULATOR’S SHOPPING LIST

• Acquisition of new office premises/plot of land in BKC 
• Setting up of 5 local offices at new locations
• Purchase of flats for senior executives at Mumbai
• Purchase of office space for NRO at New Delhi

“Physical proximity of Sebi office to investors and intermediaries would promote deepening and broadening of the securities market,” Sebi’s board had said at its board meeting last year.

In the current financial year, Sebi’s total capital expenditure will be Rs 377 crore, four times higher than the Rs 87 crore spent in the previous year. Due to this major expansion, Sebi’s total expenditure is expected to swell to Rs 623 crore, resulting in a Rs 275-crore deficit for 2012-13, according to Sebi’s budget estimates document.

The mega expansion comes in a year when Sebi’s total income is expected to dip four per cent to Rs 363.5 crore. In 2011-12, Sebi had a total income of about Rs 363 crore and a net surplus of Rs 104 crore. Lower income for 2012-13 is projected on account of decrease in fee income from intermediaries.

“On account of fall in market volumes, coupled with slowdown in primary market activity, fees from stock brokers — both equity and derivatives segments — and fees receivable for filing the offer documents, are estimated to show a decline,” Sebi said.

The market watchdog is also planning to revamp guidelines governing credit rating agencies this fiscal. Sebi will review the net worth criteria and shareholding structure of promoters of rating agencies.