Sebi set for major overhaul of role, vision

After getting sweeping powers to take on market manipulators and perpetrators of investment frauds, Sebi is now working on ways to empower the small investors and to channelise a larger flow of household savings into capital markets.

To reach this goal, the Securities and Exchange Board of India (Sebi) is considering a 'triple-A approach' of spreading awareness among investors, promoting appropriate products and ensuring proper audit of the marketplace.

This is one of the key suggestions made by an independent consultant for an overhaul of Sebi's functions, role, structure and vision, a senior official said.

The proposals, which have been made after extensive consultations with top officials from Sebi, finance ministry, RBI, IRDA and large market intermediaries, will take the final shape after incorporating the suggestions made by the board of capital markets regulator.

After consulting the internal and external stakeholders, the global consultancy major, Oliver Wyman, has suggested eight key goals for Sebi over the next five years, the top-most being 'increasing mobilisation of household savings into capital markets'.

The other goals identified in this project are building a diversified and balanced investor base in the country, developing viable alternatives to bank credit, enhancing ability to prevent and respond to crises, empowerment to investors and ensuring full trust and confidence of investors in the securities market.

Besides, it also wants Sebi to become a 'centre of excellence' for conducting supervision functions and achieve best in class efficiency, knowledge institution and employer of choice status.

An 15-point agenda has also been suggested for Sebi to achieve these eight goals. According to officials, some of the recommended measures are either already in place or are in the advanced stages of implementation, while others might be adopted in due course.

It has been suggested that Sebi should pursue the government and other regulators to address the regulatory gaps in the existing setup with proposals like consolidated supervision of all types of investment schemes through a single body and creation of a separate regulator for auditors.

Besides, Sebi has also been asked to strengthen the supervision of the exchanges' oversight of listed companies by setting up a dedicated internal team to oversee the bourses' functions and ensure adequate enforcement.

It has also asked Sebi to enhance its crisis prevention and response capabilities through steps like an effective coordination with RBI and ongoing monitoring of systemically important institutions.