MUMBAI: The first board meeting after the chairperson Madhabi Puri Buch came under fire, first from Hindenburg Research and then a flurry of charges from the Congress Party since August 10, is slated for Monday.
The board is likely to discuss the volley of charges about non-disclosures and conflicts of interest against her apart from taking a slew of policy decisions including on a dozen consultation papers that are past their deadlines for public consultation and are now ready to be taken to the board for final decisions.
In a very unusual move for the Sebi, a formal agenda has not been finalised for the crucial board meeting, according to sources. If the charges against Buch are taken up, she will have to recuse herself from the meeting.
The New York-based short-seller Hindenburg had on August 10 levelled a slew of allegations against Madhabi Buch and her husband Dhaval mostly around non-disclosures of the income from her private advisory businesses to the government and Sebi and conflicts of interest arising from Dhaval’s cushy jobs after her appointment to Sebi. Later, the Congress party leveled a series of charges based on her income tax filing and other official documents.
The Buchs have personally denied all charges. The government has not addressed the issues officially yet and the only government response so far has been letting the public accounts committee of the Parliament to call her for a performance review. A Sebi source said, “the Madhabi issue has been in deliberations since the past week or so and the board cannot discuss it.
The nature of the allegations makes it clear that the board cannot ignore them.” The board is likely to discuss as many as 11 consultation papers floated by it and have passed their deadlines for public consultations and are now ready to be taken to the board for final decisions.
Some of the key topics that are likely to the board include the proposed measures to curb the retail play in the F&O segment—something market is nervously awaiting; the regulations for ‘mutual fund lite’ for passively managed funds, introduction of a new asset class between PMS and MFs, extension of the definition of ‘connected persons’ under insider trading norms to include certain relatives, among others.
Once rolled out, the derivatives framework is expected to have a significant impact on the market, putting an end to the gambling-like trading behaviour that had taken off with daily expiries of index-derivative contracts.
The other likely big-ticket announcements include on derivatives, foreign investors, crucial decisions relevant to market players and intermediaries.
Another key reform will be the launch of the performance validation agency. It has been more than a year since a consultation paper on setting up such an agency that will authenticate the performance claims of various intermediaries including research analysts and regulated algo providers was floated.
Additional disclosure norms
Key reform will be the launch of the performance validation agency. Other topics that may get the greenlight include making it easier for foreign investors to comply with the additional disclosure norms issued in the August 2023 circular.