Sebi Meet Likely to Discuss Financial Sector Reforms
Board may put out consultative papers to tweak norms for exchanges, debenture trustees
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.