SEBI OVERHAUL UNDERWAY

With an aim to enhance its focus on mobilising household savings into capital markets and to strengthen its supervisory functions, Sebi today decided to go for a major overhaul of its role, vision and organisational set-up with a stronger workforce and greater IT resources. The nine-member board of the capital markets regulator today decided to implement a plan of action in this regard, following recommendations made by an independent consultant. Among others, it has been recommended that Sebi should impart a greater focus on mobilising household savings into capital market assets, strengthen its supervisory functions and its oversight of listed companies. Besides, Sebi has also been asked to work for a re-organisation of its functional departments, increase its manpower, improve its IT strategy for organisational efficiency and strengthen its training and performance management system. "The Board accepted the recommendations and agreed on the implementation plan for the same," Sebi said in a statement after the board meeting. The regulator had engaged leading global consultant Oliver Wyman in 2011 to "to revisit the structural and organisational issues, re-prioritise areas of focus and to look at the technological and manpower needs of Sebi". Sebi has been asked to make through greater use of soft enforcement tools like public censure and warning letters, while increasing the size of its monetary penalties for larger violations. Besides, it has been asked to issue guidance for turnaround times of cases and to set year-end targets, while ensuring a smooth handover of cases from investigation to enforcement stages. For enhancing supervision capabilities, it has been recommended that Sebi develop omnibus licencing for market conglomerates, institute a whistle blowing policy and build a state-of-the-art research and analytics cell. Other suggestions include increase in headcount with larger workforce in supervision functions, re-aligning the support functions under a Chief Operating Officer role, enhancing delegation of powers at various levels, linking monetary and non-monetary rewards to performance, skill development through external exposure and re-defining IT strategy of the organisation. The Sebi decision to overhaul its 'functions, role, structure and vision' comes close on the heels of the government granting it greater powers to deal with the market manipulators and perpetrators of investment frauds. To empower the small investors and to channelise a larger flow of household savings into capital markets, Sebi will consider a 'triple-A approach' of spreading awareness among investors, promoting appropriate products and ensuring proper audit of the marketplace.