Sebi cuts periodicity of departmental transfers
Sebi board has been focussing on addressing concerns that have dampened employee morale recently
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Investors say Sebi has taken a very wide view without understanding the nuances.
Market regulator Securities and Exchange Board of India (Sebi) has decreased the duration for inter-departmental transfers to a maximum of three years from five years, said two people familiar with the matter.
Although the objective behind the move remains unclear, a section of market players believes that the move will ensure employees do not get too comfortable with the external stakeholders that they deal with which, in turn, will reduce instances of wrongdoing among employees.
"If the sense of familiarity between the regulator and the regulatees reduces, so will the conflict of interest," said a person, on condition of anonymity.
In addition, the higher frequency of rotation will ensure that employees get a better handle on the different aspects of regulation, and get to play diverse roles. There are 18 broad departments within Sebi at present, with the major ones pertaining to corporate finance, enforcement, legal affairs, investigation and market regulation. The commodity derivatives market regulation department was created in 2015 for oversight over the commodity derivatives market.
"In the normal course of events, a lot of transfers depend on administrative exigencies. While deciding on the duration of the transfer, there's always a choice between ensuring stability and continuity versus bringing in new ideas and efficiency. There will always be a trade-off between these two factors," said JN Gupta, managing director, Stakeholder Empowerment Services and former executive director at Sebi.
While three years seems like a long enough period, some market participants believe that the reduced duration may impinge on the employee's ability to develop sufficient expertise in a specific domain.
An email sent to Sebi asking it to explain the rationale behind decreasing the tenure for making internal transfers did not get a response.
Notably, Sebi chairman's tenure is also currently limited to three years. His predecessor UK Sinha had a tenure spanning six years (with two extensions), while Sinha's predecessors CB Bhave, M Damodaran and GN Bajpai served as chairman for three years each.
According to reports, under chairman Ajay Tyagi, the Sebi board has been focussing on addressing concerns that have dampened employee morale in the recent past. One of the issues relates to external inquiries for past actions taken by the employees. The regulator has also tried to assuage concerns surrounding the appointment of employees as executive directors.
Sebi recently amended its employees' service regulations to give more clarity on the effective date of increment for employees once they are promoted. As per the amendment, if an employee is promoted before the maximum of the incremental scale in the pre-promotion grade is achieved, the next increment in the new grade would be the same as the existing schedule. The new norms will apply to employees promoted to a higher grade on or after November 1, 2012.
- Sebi has reduced the duration for inter-departmental transfers to a maximum of 3 years, from 5 years earlier
- Move will reduce time spent on the employees and individual regulated entities
- Reduced duration may impact employee’s ability to develop sufficient expertise in a specific domain
- Sebi has 18 departments, including corporate finance, enforcement, legal affairs, investigation and market regulation
- Sebi has been focussing on addressing concerns that have dampened employee morale in the recent past