Sebi expected to take final call on NSDL today

When the board of the Securities and Exchange Board of India (Sebi) meets tomorrow, there will be only two full-time representations from the regulatory body. Chairman U K Sinha and whole-time member Prashant Saran would be in the company of five others who represent either the government or the industry. The agenda, however, will comprise significant issues that have been closely followed for the last few months.

The sensitive issue of NSDL - National Securities Depository Ltd - will be discussed and a decision can be expected, as the capital market regulator has to give its final decision in the Supreme Court (SC) by August.

The board, following a petition filed in SC, has already met once in April to look into this matter but did not take a final decision. Sebi has to decide if it is ready to restore the Mohan Gopal committee order, earlier declared non-est in 2009.

Interestingly, it has been four months since the board of the regulatory body last met on March 25. The coming meet has already been postponed twice and would be keenly followed, as it would be in the absence of two whole-time members.

Both, M S Sahoo and K M Abraham, completed their three-year tenure early this month and their successors have not yet been appointed.

The board is also expected to take up the matter of Takeover Code that has been in abeyance for long. The finance ministry is believed to be through with its deliberations and the Sebi board can give its final approval after some tweaking in the recommendations of the panel headed by C Achuthan.

The Achuthan Committee has proposed that open offer trigger limit should be increased from the current 15 per cent to 25 per cent and the acquirer should make an open offer for all the remaining shares, that is 100 per cent. Industry players, however, want the size of open offer size to be in the range of 50-75 per cent. Apart from Takeover Code, the levy of transaction costs in mutual fund is expected to generate a lot of debate.

Sinha was one of the most vocal critics when former Sebi chairman C B Bhave banned entry loads in August 2009. Sinha, who earlier headed UTI Mutual Fund, formed a seven-member panel in May to examine the mutual fund sector’s grievances on the abolition of entry loads. The panel is believed to be of the opinion that a levy of Rs 100-150 per transaction along with some other changes could once again make distributing MF products a lucrative proposition. The board might also take up a few issues related to the primary market like simplification of application forms for initial public offers (IPOs) and a common form for Asba - Application Supported by Blocked Amount - and non-Asba forms that has been a long-standing demand of the industry.