New Chairperson of the Securities and Exchange Board of India Madhabi Puri Buch | Photo Credit: KUNAL PATIL
Madhabi Puri Buch has the tough task of transforming SEBI into a nimble and transparent regulator with bite
The Centre has done well to look past the bureaucratic talent pool and consider the candidature of a person with a background in investment banking and finance in Madhabi Puri Buch, as the chairperson of stock market regulator, Securities and Exchange Board of India (SEBI). Buch, the first lady and the first non-bureaucrat to head SEBI, has been in senior leadership roles in ICICI Securities, ICICI Bank and New Development Bank, Shanghai which makes her well-placed to understand the dynamics of securities markets. Besides, Buch would also have been exposed to the internal dynamics and functioning of SEBI during her 5-year term as a whole-time member at the regulator. Her involvement in key departments of SEBI such as market regulation, market intermediary regulation and supervision, integrated surveillance, and information technology equips her to hit the ground running.
Buch is assuming charge at a challenging time for the regulator. SEBI is at a critical juncture struggling to regain trust, as it undergoes scrutiny over the manner in which it handled complaints regarding alleged malpractices at the country’s largest bourse, the NSE. Buch’s primary task will be to restore the credibility of the regulator and make it a feared entity in the markets once again. While the charges of preferential access and governance failure at the NSE have moved beyond the remit of SEBI to law enforcement agencies, the regulator will be closely tracked for changes in its approach under the new chief. For starters, all complaints against market players, whether small or big, need to be dealt with equal seriousness and alacrity. Speed is of essence and SEBI should set firm time-lines for completion of investigation from the date of first receipt of complaint or information. The manner in which the investigations in some of the recent high-profile cases have been dragging on has made SEBI the subject of much ridicule. Transparency and communication needs to improve so that investors are reassured that the regulator is watching out for them. The intent behind regulatory changes needs to be communicated to investors in a lucid manner so that vested interests do not give a negative spin to regulatory moves. Publishing investigation reports commissioned by SEBI on its website will also help improve trust.
Buch can also show the way forward in harnessing the trading data available with SEBI to glean insights that can help check malpractices and improve investor trading experience. Another area that Buch needs to focus on is the quality of human resources within SEBI. The stock and commodity markets are undergoing fast-paced transition with AI, algo programs, high-frequency trades and other such innovations being increasingly used by traders and intermediaries. The market regulator needs in its ranks people who understand securities markets well; it should also help them update their skills periodically to keep abreast of changes. This will result in quicker resolution of investor complaints and well-reasoned regulations. Buch has the tough task of transforming SEBI from being just another arm of the government to a dynamic regulator of the fastest growing securities market globally.
Published on March 03, 2022