SEBI Chief: Swan song or extension game?

Everybody has all but assumed that SEBI chief CB Bhave is not getting an extension. Will they be surprised?

On Friday, 10th December, CB Bhave, the current chairman of the Securities and Exchange Board of India delivered what was considered a hard hitting piece on autonomy of regulators at the A D Shroff Memorial Lecture. CNBC TV18 anchors called it his ‘swan song’. Other sections of the media proclaimed too that an extension for the incumbent SEBI chairman was out of the question now. Is it?
 
Mr Bhave had made a pitch for independence and autonomy of regulators saying, "If regulators have to depend on the executive for the release of funds, the question of independent behaviour by the regulators will be jeopardized. It is necessary to carefully consider the pros and cons of taking (away) the financial autonomy from the regulators”. He also mentioned that "regulators do not enjoy protection in terms of the conditions under which their service can be dismissed by the executive," but admitted that this had never been done. Clearly, it seemed that he was in a reflective mood and that can happen when it is clear that he was going.
 
However, sources in Delhi insist that the game is far from over. They say that it was not by chance that a few weeks ago the Prime Minister’s Office (PMO) wrote to the Finance Ministry to ask why Mr Bhave should not be given an extension. We also learn that although the Finance Ministry has explained its position, the PMO is apparently “putting a lot of pressure” to give Mr Bhave an extension.
 
Hence, when the selection committee meets on Monday, 13th December, Mr Bhave will be very much in the running for the job although he will neither appear before the selection committee nor appear eager for the post. There is a sense of déjà vu to this situation. Last time around, Mr Bhave appeared for the interview but told the selection committee that he did not want the assignment because of cases pending against the National Securities Depository Limited (NSDL), which he then headed. He also took the opportunity to tell the board about why he felt persecuted by the then SEBI Chairman M Damodaran.
 
This time around, there are plenty of people feeling just as persecuted by Mr Bhave’s actions and decisions. The most famous of course is the MCX group’s struggle against the series of pro-National Stock Exchange actions by SEBI. The BSE is equally aggrieved, but under its present chairman, S Ramadorai (former chairman of TCS Ltd, who has a close equation with Mr Bhave) has been publicly silent about its issues.
 
Recently, even the Sahara Group did the unthinkable and issued full-page advertisements across the media to protest what it called the “irresponsible & wrongful ex-parte order” which had left it “sadly astonished”.
 
These are not the only ones. The entire mutual fund industry has been quietly waiting for the ‘Bhave reign” to end, so have Independent Financial Advisors, so are BSE brokers, who see the value of their shareholding vanish (valued at around Rs4.5 crore) if the report of the Bimal Jalan Committee, set up under Mr Bhave is accepted.
 
Incidentally, CNBC TV18 also had the market all a-flutter by announcing that an Executive Vice President of Tata Capital, Himadri Bhattacharya, was hot in the race for the post. The other names apparently are R Bandyopadhyay, secretary in the Ministry of Corporate Affairs, GP Singhal, finance secretary Madhya Pradesh, UTI Mutual Fund chief UK Sinha, RBI deputy governor KC Chakrabarty and Dr KP Krishnan, former joint secretary, Finance Ministry.
 
The market has not even heard of Mr Bhattacharya and given how the Delhi bureaucracy thinks, many believe that he is not senior enough to be a contender. Some say that the name has been included because of the Pay Commission recommendation that private sector talent should also be considered for these appointments. But, as a wag says, “anything is possible in the SEBI chairman’s appointment. The last three chairmen were not in the shortlist of three names that had been sent to the Prime Minister, so don’t be surprised if an entirely new name is sprung on the market too”.
Comments
chinmaya
1 decade ago
forget the government dear friend, recent article published in MONEY LIFE QUOTES MR SHEKHAR KAPOOR, expressing the thought of DOING things in spite of the government. THAT in deed should be our way of life and our attitude in life.. In fact if i can date back to 1995 when MFs. started gaining ground, the payouts offered by AMCs were as low or negligible as today. THE ONLY thing that has changed since then is the number of MFs you can BOUQUET to your client in terms of portfolio building and maintaining than the commissions earning capablities. You have to change from offering new schemes that were floted every now & then in the past decade by MFs,( that made u get used to earning from the manufacturer than the existing clients),to being a financial friend of ur clients and earning from them. The time spent in marketing and speaking of MFs and the schemes giving good and consistant returns, has had a decade of stories to be told and understood. Rather The MARKET has expanded in terms of the number of munafacturers and their quantity i.e. their AUM size. There was a role that the manufacturer wnated u to play in him being a significant player in the market place over a period of time. What u need to analyse and do NOW, is that, on a constant basis keep a check on the existing schemes that ultimately effect the returns of the clients portfolio, than cherishing scheme specific marketing or goals. AND all said and done if ur client is already capable of doing this on his own he simply needs u as a FRIEND to discuss his point of view. This then becomes the opportunity of asking him to give u a referral of those who need ur services, as ur client cannot manage the portfolio of his friends or relatives due to obvious reasons. This further enhances the scope of advising and building relationships that last long enough than the changing Govt policies. Also bare in mind the Reports that have shown peoples wealth not building up because of mis-selling or wrong doing of the seller in the market place.DO not look down upon this profession, if it all it is in ur case, just put it ahead of all the ones that u would have thought of comparing it with. REMEMBER, ONE THING IN LIFE THAT "CHANGE IS THE ONLY THING THAT IS CONSTANT" .
chinmaya
1 decade ago
for all those (IFAs) who cannot charge their clients and want the earlier mess to continue giving the so called BADDUA ,please CHANGE yourself as the world will not change for U, infact it will only give u an opportunity to change. Please prey to god if UR emotions are too high, that u get clients that listen to ur advise and feel like paying u. MR. BHAVEs reappointment hence may/may notbe disputed with other contenders.
Roopsingh
Replied to chinmaya comment 1 decade ago
why u advocating compulsory implementation of fees based structure?why u dont want investor to have option of direct or commission based(dual) method both open to him?it looks like that entry load removal regime is forcing people to compulsory go to Ration shop and eat subsidised food grain.the investor has been asked to compulsorily go for zero entry load-this 2% removal has done 40-50% loss to investors due to reduced inflow of funds to amc's and due to redemption pressure-so what investor has gained.neither 2% nor the gains of market.
if it is to be implemented for mutual funds only then it is wrong,first implement it to every goods or services like TV shop,mobile shop,recharge coupons ,medicines etc-then do this fees based struture for MF investments-if u can not ask govt to do this for all goods and services-their will always be BADDUAS to these Tughlaki fatwas
Roopsingh
1 decade ago
Mr Bhave is thrown out by search panel-and the chosen name is Mr UK Sinha who has so far acted in balanced way-which was demanded by the IFAs-it is evident that "LOT OF BADDUA(cursing) OF HARD WORKING IFAs and retail investors has been heard by god through search panel-DUSRO KE LIYE JO KHADDA KHODTA HAI WOH KHUD USME JARUR GIRTA HAI
Hriman S
1 decade ago
Let the govt pick an unbiased clean person, who will be for compettition and not for monopoly. And who will be retail growth.
SANJOY
1 decade ago
carry on carry on no problem no surprise,we the common people/aam admi only for u. dont worry.no body asked the govornment.u carry on bravely.who is new sebi chief? who gose lanka he is ravan so no probs.
Renu
1 decade ago
it is really surprising that PMO always like the most corrupt people in INDIA to be the head of various regulatory bodies like CVC, SEBI, NSDL, etc. AND we still say our Dear Prime minister is a great economist and wants to clean up the bureaucracy.
Raj
Replied to Renu comment 1 decade ago
I fully agree to u abt what you have said abt our world famous PM-who has always tried to keep his eyes and lips shut whenever any SCAM had been found-and he is heading a group of most corrupt ministers like Sharad pawar(commodity satta king,A raja(telecom scammer,and kalmadi and non other then C B BHAVE who has brought never seen systematic cleaning of retail partcipation from indian equity and who has given immense upper hand to FIIs by red carpeting them easy accessthrough p-notes but asking for pan card compulsion for un educated hard working indian person).Mr PM has never expressed any thing against these people-so i 100% agree with this
Raghupathi
Replied to Renu comment 1 decade ago
You can accuse Mr.Bhave for anything, but for corruption. His integrity and honesty is beyond doubt.
Raj
Replied to Raghupathi comment 1 decade ago
i agree that Mr Bhave is 100% loyal to corruption and its undoubted that he is supporting all these corrupt people.
rajesh
Replied to Raghupathi comment 1 decade ago
maybe. but how do you know?
AA
Replied to rajesh comment 1 decade ago
Madhusudan Thakkar
1 decade ago
In our constitution Parliament is supreme and no regulators should not be given unlimited powers.Elected representatives are flexible and pragmatic.We should not allow our system to be hijacked by people who have hidden agenda.
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