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The Securities and Exchange Board of India will now have to transfer 75 per cent of its surplus from the general fund every year to the Consolidated Fund of India that is managed by the Central Government. An announcement to this effect was made in the Budget via a proposed amendment to SEBI Act 1992.
SEBI has a surplus of ₹3,170 crore as per its 2017 balance sheet, which is the latest available in public domain. The surplus could go up by several hundred crore rupees once its 2018 balance sheet is out.
The Budget has proposed that SEBI should constitute a reserve fund and 25 per cent of the annual surplus of the general fund should be credited to this reserve fund. Moreover, the transfer to the reserve fund every year should not exceed the total annual expenditure of the preceding two years. After meeting all expenditures, SEBI should transfer the leftover amount to the Consolidated Fund of India, according to the Budget proposal. A gazette notification to this effect will be issued after the Budget is passed in Parliament.
The General Fund is all the amount that the regulator gathers during the entire year via fees and other payments from market intermediaries. Like a statutory tax on equity transaction, there is a small portion that also goes to SEBI on every equity market transaction. In 2018, SEBI had used up a large part of its reserve to the tune of ₹1,000 crore in purchasing another office for itself at Bandra Kurla Complex.
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