Markets

Tough challenges ahead for Sinha

Our Bureau Chennai | Updated on February 18, 2011

Mr U. K. Sinha, Chairman of SEBI, has some tough tasks ahead of him, including taking a decision on the long-pending case against Mr Mukesh Ambani-controlled Reliance Industries on alleged insider trading.

The case is pending against RIL since Mr M. Damodaran's term as the SEBI chief. The Reliance Industries case relates to the alleged violation of insider trading norms in 2007 in Reliance Petroleum (RPL), which got merged with Reliance Industries subsequently.

There were reports that the company made a few attempts to settle the case through the ‘consent route' but that did not materialise. The mutual fund industry is also pinning hopes on him as it has been bleeding ever since SEBI removed entry load in 2009. As Mr Sinha hails from the MF industry (UTI Mutual Fund), the industry is expecting him to take some measures that could revive inflows into the sector.

Mr Sinha had told Business Line in 2009 that the mutual fund industry does not have a collective voice of protest.

“If you are Chairman of a large group which has got an insurance company and a mutual fund, very little capital flow is involved in the mutual fund business and a very high amount of capital is involved in the insurance business. So, if the CEO of the mutual fund company and CEO of the insurance company both come and complain to you, it's very simple whom you are going to listen to. So the mutual fund industry doesn't have a voice,” Mr Sinha had told Business Line.

Another key challenge that Mr Sinha has to deal with is maintaining the autonomy of SEBI, particularly when the Government is planning a super regulator in the form of FSDC or the Financial Stability and Development Council.

Mr Sinha has to also decide on the takeover code proposed by the Achuthan committee and on market infrastructure institutions regarding ownership and profitability of stock exchanges recommended by the Bimal Jalan committee.

Mr Sinha's has to also deal with MCX-SX issue. Financial Technologies, which is the main promoter of this exchange, had dragged SEBI to Court, following the rejection of its application for equity trading citing non-adherence to ownership norms.

Published on February 18, 2011

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