Sebi chief Ajay Tyagi's tenure ends today, all eyes on next appointment

The delay on Sebi chief appointment comes despite the centre initiating the process to find a replacement four months ago

The stock market ecosystem continues to wait for news on the appointment of a new chairman of market regulator Securities and Exchange Board of India (Sebi).

Current chairman Ajay Tyagi’s tenure ends on Monday. He, however, is eligible for an extension.

Many are surprised that the government has not yet made a formal announcement as to whether the Sebi headquarters in Mumbai will be occupied by a new person or Tyagi get another extension. The delay comes despite the Centre initiating the process to find a replacement four months ago.

“Applications are invited from the eligible candidates for filling up the post of chairman in Securities and Exchange Board of lndia (Sebi). The Chairman shall have an option to receive pay (a) as admissible to a secretary to the Government of lndia; or (b) a consolidated salary of Rs 450,000 per month as recommended by the Seventh Pay Commission and subsequently accepted by the Government vide Resolution dated 25th July 2016,” the Ministry of Finance has said in a notification dated October 28.

Former DFS secretary Debashish Panda, revenue secretary Tarun Bajaj, finance secretary TV Somanathan, IFSC Authority Chairman Injeti Srinivas and former Sebi whole-time member Madhabi Puri Buch were said to be top contenders for the job.
Until recently, Tyagi was pegged to get a further extension. However, the fresh controversy around various lapses at the National Stock Exchange (NSE) could have complicated the matters, say industry watchers. Although the issue dates back to before Tyagi assumed office.

In April 2019, Sebi had issued a series in the NSE colocation controversy, which included a Rs 1,000-crore penalty on the exchange. Broking outfits OPG Securities and Way2Wealth Brokers were asked to pay over Rs 15 crore each, plus interest. NSE’s former MD & CEOs Ravi Narain and Chitra Ramkrishna were asked to digorge 25 per cent of their salary for a said period in addition to a five-year market ban.

Tyagi, 63, was initially appointed for a three-year term in 2017. In February 2020, he was given a six-month extension. Later in August 2020, the government granted another 18-month extension amid the disruption caused by the pandemic. The 1984-batch IAS officer from Himachal cadre is credited with ensuring smooth functioning of the market amid the pandemic. Under his watch, Sebi oversaw a record IPO mobilisation and processed over 100 DRHPs in 2021. Tyagi also implemented challenging reforms for the broking industry amid a spate of defaults and instances of misuse of client securities.

Industry players said the Sebi chairman’s position shouldn’t be kept vacant at a time when the markets are going through intense volatility due to global headwinds such as Russia-Ukraine conflict, expected interest rate increases by the US Federal Reserve and the repercussions of oil prices crossing $100 a barrel for the first time since 2014.

The market regulator is functioning with two whole-time members with the tenure of G Mahalingam and Puri Buch ending late last year.

There was no announcement on the next Sebi chief at the time of going to press.