 "Sebi chief's third-year scorecard")
Securities and Exchange Board of India 's (Sebi) UK Sinha has his task cut out as he gets a fresh term as the head of capital market regulator.
In his fourth year as the Sebi chief, the 61-year old career bureaucrat's focus will be on implementing a number of key changes in the regulatory framework that have already been initiated. A new corporate governance code, a revamp of the existing insider trading norms and framework for real estate investment trusts (REITs) are in various stages of implementation. Sinha, who ensured that all listed companies achieve the 25% minimum public shareholding requirement within the deadline, will hope to do an encore in other areas as well.
Unfinished Agenda
New corporate governance code: The new framework will up the governance ante among listed companies. It will for the first time see the introduction of several new concepts such as ---lead independent director, mandatory CSR, compulsory rotation of auditors, succession planning, whistle blowers policy and class action suits.
Also Read
Revamp of insider trading norms: Sebi’s 18-member expert panel on insider trading has already submitted its recommendation, which includes bringing public servants with access to price sensitive information under the insider trading net. The regulator has gathered public feedback on the report and may soon clear the new framework.
REITs & Infrastructure trust: Sebi will take another shot at introducing REITs in the country. The regulator hopes that the tax department will be on board on the initiative, which is expected to open new liquidity stream for the cash-starved realty and infra sectors.
New delisting norms: Sebi has agreed to ease the delisting norms but Sinha will have to walk the tight rope between managing investor expectations and that of companies.
New ESOP norms: New regulations on employee benefit schemes that will once again allow secondary market purchases.
Research analysts norms: To implement norms that will mandate all research analysts to register with Sebi before they can give advice on investing.
Other proposals: Framework for annulment of trades; reduction of trade settlement cycle to T+1; dealing with FTIL's stake in MCX-SX; Improving enforcement action.
Important initiatives during Sinha's third year in office
Free float norm: Despite a clamor for extending the deadline for meeting the 25% public shareholding requirement, Sebi stuck to the date and made sure most the companies --both public and private --achieved compliance.
Put & call options in M&A: Sebi allowed use of put & call options in M&A transactions giving more flexibility to India Inc in structuring their deals.
New regime for foreign investors: The foreign investor regime saw a change, with the Foreign Institutional Investor (FII) framework being replaced with the new Foreign Portfolio Investor (FPI) regulations, easing portfolio investments into the country.
Crackdown on unauthorized investment schemes: The regulator with the additional powers of search and seizure as well as attachment of properties, gained through an ordinance, took on dubious investment schemes throughout the country
New segments on stock exchanges: Sebi asked exchanges to launch a separate platform debt trading platform. It also allowed an institutional trading platform (ITP) for companies to list without an IPO.
New products: Sebi launched interest rates futures (IRF) in a new cash-settled avatar. It allowed trading on the NSE's Volatility index (VIX).
Other measures: Converted the consent circular into regulations; Tightened buyback norms; Scrapped IPO grading; Allowed shelf prospectus; Took steps to protect minority shareholders in suspended companies; Asked exchanges to ensure disclosures norms are followed by companies.