Will Ajay Tyagi get another extension? All eyes are on Sebi’s appointment as chief

The stock market ecosystem is eagerly awaiting news around the appointment of a new chairman of the Securities and Exchange Board of India (Sebi) market regulator.

Current President Ajay Tyagi’s term ends on Monday. However, he is entitled to an extension.

Many are surprised that the government has yet to officially announce whether Sebi’s Mumbai headquarters will be occupied by a new person or whether Ajay Tyagi gets another extension. The delay comes despite the center initiating the process to find a replacement four months ago.

“Applications are invited from eligible candidates to serve as Chairman of the Securities and Exchange Board of India (Sebi). The President shall have the option of receiving remuneration (a) as receivable for a Secretary to the Government of India; or (b) a consolidated salary of Rs 450,000 per month as recommended by the Seventh Pay Commission and subsequently accepted by the government via the resolution of July 25, 2016,” the Ministry of Finance said in a notification dated October 28.

Former DFS Secretary Debashish Panda, Revenue Secretary Tarun Bajaj, Finance Secretary TV Somanathan, IFSC Authority Chairman Injeti Srinivas and former full-time member of Sebi , Madhabi Puri Buch, would be the main candidates for the post.

Until recently, Tyagi was supposed to get another extension. However, the new controversy surrounding various breaches on the National Stock Exchange (NSE) could have complicated matters, say industry watchers. Although the problem dates back to before Tyagi took office.

In April 2019, Sebi posted a series in the NSE colocation controversy, which included a Rs 1,000 crore penalty on the swap. Brokerage firms OPG Securities and Way2Wealth Brokers were asked to pay over Rs 15 crore each plus interest. Former CEOs and CEOs of NSE, Ravi Narain and Chitra Ramkrishna, have been asked to cut 25% of their salaries for a certain period in addition to a five-year market ban.

Tyagi, 63, was originally appointed for a three-year term in 2017. In February 2020, he received a six-month extension. Later in August 2020, the government granted another 18-month extension amid the disruption caused by the outbreak of the covid-19 pandemic.

The 1984 IAS officer of the Himachal cadre is credited with keeping the market running smoothly amid the pandemic. Under his leadership, Sebi oversaw record IPO mobilization and processed over 100 DRHPs in 2021. Tyagi also implemented tough reforms for the brokerage industry amid a series of defaults and misuse of customer credentials. Chief Sebi has also begun the transition to a shorter trade settlement cycle despite opposition from foreign portfolio investors (REITs). Sebi also signed into law key changes to mutual fund regulations amid a crisis of confidence following the Franklin Templeton Mutual Fund’s decision to close six of its programs citing liquidity pressure in April 2020.

Industry players have said that the position of Sebi chairman is unlikely to remain vacant at a time when markets are going through intense volatility due to global headwinds such as the Russia-Ukraine conflict, interest rate hikes interest forecast by the US Federal Reserve and fears of a deterioration in the macroeconomic situation. fundamentals due to oil prices exceeding $100 a barrel for the first time since 2014.

Already the market regulator operates with just two full-time members, with the terms of G Mahalingam and Puri Buch ending at the end of last year.

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