Sebi plans to preserve autonomy, stop ₹4,400 cr payment to govt
The Securities and Exchange Board of India (Sebi) is in talks with the ministry of finance to prevent an outgo of around ₹4,400 crore from its accounts to the government, fearing that it will impact its autonomy as regulator and hinder market development projects, said two people with direct knowledge of the matter.
“In a meeting on April 2, Sebi discussed the issue with finance ministry officials and sought to preserve its autonomy like the Reserve Bank of India (RBI) and to prevent an outgo of any funds, including service tax,” one of the two people cited above said, requesting anonymity.
A group of employees at Sebi are seeking that the government remove clause 15JA of the Sebi Act, said the second person, also requesting anonymity. The clause says all money collected by Sebi as penalties should be remitted to the consolidated fund of India.
According to Sebi’s latest statement of accounts, in the financial year March 31, 2018, the regulator had ₹1,970 crore in its
MUMBAI:
so-called general fund. When the interest on this amount is added, it totals to at least ₹3,000 crore, the two people cited above said.
“Sebi wants this general fund to remain with the regulator. Sebi is an autonomous authority and the law says Sebi is independent to earn and utilise its own income,” said the first person.
Sebi is also mulling asking the government that an amount of around ₹650 crore that has been remitted to the government in the past three years should be returned to the regulator, the two persons said.
Sebi has collected this amount from penalties on market defaulters, bidding fees (for allocation of investment limits to foreign investors), disgorgement of illegal gains by defaulters and various other capital market measures. Additionally, Sebi wants the government to stop demanding service tax dues worth around ₹300 crore from the market regulator.
Sebi was issued a second service tax show cause notice in the last week of February, which includes the service tax demand for fiscal 2015-16. While the earlier demand stood at ₹130 crore (including interest), it has increased to ₹213 crore (with interest).