This refers to “Sebi chief questions Budget plan for transfer of surplus funds to govt” (July 18). Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi must be praised for seeking a review of the proposal that mandates transferring 75 per cent of the market regulator's surplus funds to the central government. Tyagi has claimed that the proposed move would affect the functioning of Sebi as well as the securities market while over-emphasising the rationale behind the market regulator keeping a reserve fund for mandatorily protecting the interests of the investors.
As stated in this report, two provisions — one related to the surplus transfer and the other related to seeking prior approval from the finance ministry for raising expenses — haven’t gone down well with the markets regulator which considers those as an additional tax. The Department of Economic Affairs’ idea behind the proposed move to “address the issue of accumulation of huge surplus funds” with the Sebi could be similar to the government’s earlier game plan to corner the so-called surplus funds of the Reserve Bank of India.