Sebi Board May Get Securities Ind Nominee
The Securities and Exchange Board of India (Sebi) may shortly get one representative from the securities industry, if the views of the Sebi top brass and the government on the issue converge. With the retirement of L C Gupta, the public representative on the Sebi board, the stage is now set for one more member to be inducted.
Highly placed sources said with Guptas exit, there is now a possibility that a fresh list of people, some of whom are drawn from the securities industry, may be sent to the government for approval.
Guptas exit marks the end of an important chapter in the Sebi boards history, since his entry was significant in that he was the lone outsider in a board packed with government officials. Gupta, known for his forthright views on capital market issues, also became an important and much-discussed board member owing to his criticism of the erstwhile badla system.
He, however, continues to be associated with Sebi, and is now heading its panel on derivatives trading. The Sebi board, consisting of bureaucrats without representation from the securities industry, has been criticised by the financial market.
The board was recently upgraded to include senior bureaucrats, giving it greater clout and power. As a result, the board now has, apart from Sebi chairman D R Mehta, Shankar Acharya from the finance ministry, law secretary Aggarwal, Reserve Bank deputy governor S P Talwar and a representative from the Indian Institute of Management, Ahmedabad. One slot still remains vacant.
Sources say the slot will be crucial to determine whether the Sebi board finally has the much-awaited representative from the securities industry. Preferably, the shortlist will be one where the candidates have the requisite experience in the securities industry. They may not necessarily be stockbrokers, the sources said.
Sources pointed out that the list of candidates may be sent if there is a chance of the Centre being favourably inclined to the proposal to induct a member from the securities industry. According to sources, the composition of the board itself is one of the major stumbling blocks before Sebi, since a number of obstacles get created often before a proposal is cleared by it. One such issue, which grabbed headlines not too long ago, was the clearance to the modified carryforward system suggested by the G S Patel committee.
While the Patel committee had recommended several checks and balances in its carryforward system, the Sebi board put stringent conditions and cleared a rigid version at the first shot.
Persistent efforts thereafter by Sebi chairman Mehta finally resulted in the Patel recommendations being cleared in toto.