Sebi Meet Likely to Dis­cuss Fi­nan­cial Sec­tor Re­forms

Board may put out con­sul­ta­tive pa­pers to tweak norms for ex­changes, deben­ture trustees

The Economic Times - - Money -

Mum­bai: The Se­cu­ri­ties and Ex­change Board of In­dia (Sebi) is likely to con­sider putting out con­sul­ta­tive pa­pers to tweak norms for stock ex­changes and on deben­ture trustees in its board meet­ing on Satur­day.

Fi­nance Min­is­ter Arun Jait­ley will at­tend the meet­ing, pos­si­bly the last of UK Sinha, whose term as the chair­man for the cap­i­tal mar­ket reg­u­la­tory body ends on March 1. The cus­tom­ary post-bud­get meet­ings of the Fi­nance Min­is­ter with the boards of Sebi and the Re­serve Bank of In­dia (RBI) will be held in New Delhi. The meet­ings will dis­cuss var­i­ous fi­nan­cial sec­tor re­forms pro­posed in the Union Bud­get 2017-18.

The Sebi board might also dis­cuss com­ing out with a con­sul­ta­tion paper on pub­lic util­i­ties, such as stock ex­changes, de­pos­i­to­ries and clear­ing corporation to re­view norms based on the rec­om­men­da­tions made by the Bi­mal Jalan com­mit­tee. “It would be an open -ended con­sul­ta­tive paper,” said a reg­u­la­tory of­fi­cial fa­mil­iar with the de­vel­op­ment.

In 2010, the for­mer RBI gover­nor had sub­mit­ted a re­port on the reg­u­la­tory frame­work for mar­ket in­fra­struc­ture in­sti­tu­tions to Sebi. The com­mit­tee had said rules should be re­viewed five years af­ter im­ple­men­ta­tion of the re­port. The five-year dead­line is ap­proach­ing in June.

Re­cently, one of the ex­changes sought the reg­u­la­tor’s ap­proval to align di­rec­tors’ re­mu­ner­a­tion with the Com­pa­nies Act. At present, di­rec­tors on the board of stock ex­changes are paid only sit­ting fees as per the Jalan com­mit­tee rec­om­men­da­tion.

The reg­u­la­tor’s board may also dis­cuss on putting out a con­sul­ta­tion paper on deben­ture trustees to align Sebi rules with other reg­u­la­tions such as the Com­pa­nies Act.

The board will also talk of the mea­sures taken by Sebi un­der Sinha’s ten­ure. The Sebi board, which con­sists of rep­re­senta- tives from the fi­nance min­istry, cor­po­rate affairs min­istry, RBI and in­de­pen­dent part-time mem­bers, apart from the Sebi Chair­man and whole-time mem­bers, will dis­cuss the role of the reg­u­la­tor in the Rs 5,600-crore NSEL (Na­tional Spot Ex­change Limited) scam and delist­ing of small com­pa­nies with thinly traded shares from stock ex­changes among oth­ers.

The mar­ket reg­u­la­tor had ini­ti­ated ac­tion against top bro­kers for their al­leged role in the Rs 5,600-crore scam on NSEL that sur­faced in July 2013. The reg­u­la­tor af­ter com­plet­ing its pre­lim­i­nary in­ves­ti­ga­tion ap­pointed three ad­ju­di­cat­ing of­fi­cers to in­quire into the mat­ter and take le­gal ac­tion. Sub­se­quently, the reg­u­la­tor is­sued show-cause no­tices to five lead­ing bro­ker­age h o u s e s — Ana n d R a t h i Com­modi­ties, IIFL Com­modi­ties, Moti­lal Oswal Com­modi­ties, Ge­ofin Com­trade and Phillip Com­modi­ties In­dia — ask­ing them to ex­plain why their cer­tifi­cates of reg­is­tra­tion in the se­cu­ri­ties mar­ket should not be can­celled.

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