Govt starts search for new Sebi whole-time member

As the selection process for a new Sebi chairman is currently underway, the government has also begun a recruitment drive to hire a new whole-time member on the board of the capital markets regulator.
Among the three whole-time members, the current tenures of Prashant Saran and Rajeev Kumar Agarwal end this year, while that of S Raman will end in 2017.
The term of the current Sebi chairman U K Sinha ends next week on February 17 and a search process was initiated to find his successor in August last year.
As per reports, the government has shortlisted three names, although there has been no official word on the same as yet.

Sinha, a 1976 batch IAS officer of Bihar cadre, assumed office as the Securities and Exchange Board of India (Sebi) Chairman on February 18, 2011 when the previous UPA government was in the power.
While Sinha was initially appointed with a three-year term, he was later given a two-year extension. As per his age, Sinha is eligible for a one-year extension.

In the latest development, the Finance Ministry has now kick-started the process for filling up "one vacancy of Whole Time Member in Sebi".
While the Ministry did not specify whom the new person would replace on Sebi board, the tenure of Saran would end before that of Agarwal among the two retiring this year.

The Member would have an option to receive pay as admissible to an Additional Secretary to the Government of India, or a consolidated salary of Rs 3,75,000 per month.
The Chairman gets an option to receive pay as admissible to a Secretary to the Government of India, or a consolidated salary of Rs 4.5 lakh per month.
Inviting applications, the Finance Ministry said in a notification that the Member would be appointed for a five-year period or up to the age of 65 years, whichever is earlier. Besides, he would be eligible for re-appointment.
Similar appointment conditions apply for the Chairman.

For the post of Whole Time Member, applications have been invited by March 11.
"The appointment shall be made by the central government on recommendation of the Financial Sector Regulatory Appointments Search Committee (FSRASC)... It may, however, be noted that the FSRASC is free to identify and recommend any other person also, on the basis of merits, who has not applied for the post," the Ministry said.
In addition to the post of Chairman, the government is empowered to appoint five members on the board of this key regulatory body, which regulates stock exchanges, various kinds of market entities including brokers, mutual funds, FIIs, rating agencies and investment bankers, as also thousands of listed companies.

Of these five members, at least three must be whole-time members.
Currently, there are three whole-time members on the Sebi board, while the government in July last year appointed Arun Sathe, who has been an RSS full-timer in the past and who had unsuccessfully fought Lok Sabha elections as a BJP candidate in 1989, as a 'Part-Time Member'.
Under the new guidelines, no person connected with the
issue can offer any direct or indirect incentive "in any manner, whether in cash or kind or services or otherwise to any person for making an application for allotment of units".
However, this would not apply to fees or commission for services rendered in relation to the issue.

The regulator may, in the interest of investors or for the development of the securities market, relax the strict enforcement of any requirement of these guidelines, if it is satisfied that the "requirement is procedural in nature, the non-compliance was caused due to factors beyond the control of the InvIT and the requirement may cause undue hardship to investors" among others.
Besides, Sebi has issued format for due diligence certificates to be given by a merchant banker along with draft offer document.