Higher fee to pull Sebi budget back from deficit

The Securities and Exchange Board of India's budget is projected to have a deficit of Rs 76.6 crore (Rs 766 million) in the current financial year. An increase in intermediary fees will help turn this into a surplus of Rs 105.7 crore (Rs 1.05 billion), according to estimates based on the regulator's board meeting minutes.

In March, the Sebi board announced it would raise fees for intermediaries, collecting 90 per cent more from here than it had in recent years, on the basis of recommendations from its Committee on Rationalisation of Financial Resources.

"After adopting recommendations of CRFR, there shall be a surplus of Rs 105.7 crore (Rs 1.05 billion)," it stated.

The total income for FY15 was estimated to be Rs 372.2 crore (Rs 3.72 billion) before the fee increase. After the revisions, fees from intermediaries alone would be Rs 378.4 crore (Rs 3.78 billion).

Total income will be at Rs 554.4 crore (Rs 5.54 billion), including investment and miscellaneous income of Rs 157.9 crore (Rs 1.57 billion) and Rs 18.2 crore (Rs 182 million),

respectively.

The regulator's revenue expenditure is set to go up by 20.6 per cent to Rs 280.7 crore (Rs 2.8 billion) from the earlier year.

This will comprise establishment and administrative expenses of Rs 167.2 crore (Rs 1.67 billion) and Rs 87.6 crore (Rs 876 million), respectively.

It was felt income needed to improve to meet the increased expenditure requirements, according to the board meeting minutes, leading Sebi to reverse its fee cuts of five years earlier.

“The downward revision of fee in 2009 was undertaken as it was considered ideal the fees levied by statutory authorities like Sebi should be adequate to (only) meet its revenue expenses fully and leave a little surplus for capital expenditure.

"However, the enhanced scope and role of market regulator at today’s time requires much higher financial commitment to remain effective and efficient as a regulator.

"Also, the anticipation of market volumes, having a secular trend of growth, has not materialised,” said the board minutes.