Smart Money Inc. New chairman UK Sinha plans to revamp Sebi

The new chairman has sought opinion from all department heads about the
scope of the proposed reconstitution

Within a week of taking charge, U.K. Sinha, the new chairman of capital
market regulator Securities and Exchange Board of India (Sebi), has
initiated plans to revamp the organization.

Sinha circulated a note last Thursday on the review of eight advisory
committees that are currently working under Sebi.

The new chairman has sought opinion from all department heads about the
scope of the proposed reconstitution, said two persons with direct knowledge
of the matter. "He wants to take a fresh look at the issues handled by these
committees," one of them said.

"The chairman has asked about the relevance of all the existing members of
such committees," the second person said. Both officials requested anonymity
as the matter is yet to be made public.

Sinha has proposed to look into the tenure of the members of such
committees, their contribution to Sebi's policies and the relevance of their
recommendations.

An email sent to Sebi on Friday remained unanswered.

A Sebi official, on condition of anonymity, said exploration of the scope of
reconstitution of the committees is only part of the new chairman's plan.

"He wants to take a fresh look at the ways the entire organization has been
working. At the second stage, possible changes will be made," the official
said. "One should not view the proposed reconstitution of the committees in
isolation."

There are eight Sebi advisory committees on mutual funds, the secondary
market, the primary market, corporate bonds and securitization, investor
protection and education fund, disclosures and accounting standards, consent
orders and compounding of offences, and the takeover panel.

Incidentally, Sinha has been a member of at least two such committees—the
committees on mutual funds and the secondary market—as chairman of UTI Asset
Management Co. Ltd, his previous assignment.

"Sometimes, the chairman may have a reform agenda and he may want to bring
in new committee members to suggest ways to bring changes," said one of the
members of the committee for disclosures and accounting standards. He
declined to be named.

The Sebi chairman has the authority to reconstitute committees, form new
committees, and close or merge any of them. Under the stewardship of Sinha's
predecessor C.B. Bhave, who stepped down on 17 February, the regulator
formed a new statutory committee to review and suggest changes for India's
takeover regulations.

During the tenure of M. Damodaran, whom Bhave replaced, the committee on
disclosures and accounting standards was formed by merging two panels on
disclosures and accounting standards.

Typically, a member serves on a committee for three years, but there is no
fixed term.

"It's not a statutory requirement to reconstitute advisory committees when
the chairman changes. The members of advisory committee could be a
continuity from one chairman to another," said Susan Thomas, member of the
secondary market advisory committee, and assistant professor, Indira Gandhi
Institute of Development Research.

"Mere change in the constitution of committees may not help. Sebi may ensure
regularity of meetings of these committees. Sometimes the committees do not
meet for several quarters and this prevents continuity in reforms in line
with the evolution of markets," said H.N. Sinor, a member of the advisory
committee on mutual funds and chief executive officer, Association of Mutual
Funds in India.

Bhave went up against companies and other regulators during his tenure as
part of efforts to enhance transparency and benefit investors.

On Sinha's agenda are a new framework for mergers and acquisitions for
Indian companies (following the recommendations of the takeover regulations
advisory committee headed by C. Achuthan, former chief of the Securities
Appellate Tribunal), new guidelines for market infrastructure institutions,
such as stock exchanges, and depositories and clearing corporations
(following recommendations by a panel headed by former Reserve Bank of India
governor Bimal Jalan), among others.

"Since a new incumbent can't change senior officials of the organization, he
may try to bring in new voices as advisers. It makes sense to bring new
members in the advisory committees for a fresh perspectives on critical
issues," said a member of the secondary market advisory committee,
requesting anonymity.
Source:
http://www.livemint.com/2011/02/27234811/New-chairman-UK-Sinha-plans-to.html?h=A1

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