Tyagi will be the first chairman to get an initial five-year term since at least 2002. Sebi’s previous four chairmen were all appointed on an initial term of three years. Sinha, too, was appointed for a three-year term. However, his tenure was extended by two years in 2014, because of adverse market conditions and another year in 2015.
Sandeep Parekh, founder of Finsec Law Advisor and former executive director of Sebi, said the new chairman would have to focus on the improving the accountability and governance at stock exchanges, further streamlining of the process for capital raising and enhancing India Inc’s disclosure standards.
Market players say the immediate challenges before Tyagi would be to infuse new ideas at Sebi and to ensure that the ongoing integration process of Sebi and erstwhile commodities market regulator Forward Markets
Commission goes on smoothly. Also, Sebi is currently operating with only two whole-time members, with one position lying vacant for since November 2016.
Among key policy decisions, Sebi is the process of issuing new rules on algorithm or high-frequency trading (HFT), tweaking of the takeover code by introducing the “brightline” test and also working on the Supreme Court-appointed panel on the participatory note (p-note) framework.
Besides, Sebi is also working on new areas such as the municipal bond market, International Finance Centre (IFC), start-up listings and real estate investment trusts (Reits).
“The chairman will have to ensure the development of the securities market while ensuring a right regulatory framework,” said J N Gupta, founder of governance firm SES and former ED of Sebi.
Some of the key cases pending before Sebi include the unfair access allegations against the National Stock Exchange (NSE), alleged insider trading violation at Reliance Industries and alleged takeover code violations at United Spirits. Sebi is also in the process of clearing NSE IPO document and approving the appointment of the exchange’s new CEO designate Vikram Limaye.
In the past, Sebi has had trouble cracking down on illicit money collection schemes and tax evasion on through the stock exchange platform.