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The Ministry of Finance has initiated the process of appointing a new chairperson for the Securities and Exchange Board of India (SEBI), with the term of the current chairperson, Madhabi Puri Buch, set to conclude on February 28, 2024. The finance ministry has published a vacancy notice inviting applications for the position, highlighting specific eligibility criteria and emphasizing the importance of the role.
Eligibility Criteria for Applicants
The vacancy notice specifies that candidates must be at least 50 years old and possess a minimum of 25 years of professional experience in fields such as law, finance, economics, accountancy, or administration. Applicants should also demonstrate high integrity and an ability to address challenges in the securities market.
The finance ministry added that the SEBI chairperson must not have any financial or other interests that could adversely impact their ability to perform their duties. The Financial Sector Regulatory Appointments Search Committee (FSRASC) is tasked with recommending candidates, including those who may not have formally applied for the position.
New Five-Year Term for SEBI Chairperson
The new chairperson is expected to serve an initial five-year term, marking a departure from the previous practice of appointing SEBI heads for three years. However, candidates cannot exceed the age of 65 during their term. The deadline for submitting applications is February 17, 2024.
Speculation Around Madhabi Puri Buch’s Tenure
Madhabi Puri Buch, who has held the SEBI chairperson position since March 2022, is eligible to reapply for another term. However, her tenure has been marred by controversies. Allegations of conflict of interest during SEBI’s investigation into the Adani Group, raised by U.S.-based short-seller Hindenburg Research, have fueled speculation about her future. While Buch has denied these allegations, the controversy has placed her under intense scrutiny.
Buch’s tenure has also seen internal dissent, with SEBI employees raising concerns about a “toxic work culture” and other human resource issues. Despite these challenges, her leadership has brought significant reforms to the regulatory framework, including faster approvals, enhanced disclosures from foreign portfolio investors (FPIs), measures to curb client float misuse by stockbrokers, and initiatives in the mutual fund and alternative investment fund (AIF) sectors.
Who is Madhabi Puri Buch?
Madhabi Puri Buch holds the distinction of being the first woman and the youngest chairperson to lead SEBI. She is also the first individual from the private sector to assume the role. An alumnus of IIM Ahmedabad and St. Stephen’s College, New Delhi, Buch has over three decades of experience in the financial markets.
She began her career with ICICI Bank in 1989 and has since held senior positions across various organizations, including ICICI Securities and the New Development Bank in China. Buch is also the founder-director of Agora Advisory Pvt. Ltd., a consulting and incubation firm.
During her time at SEBI, she oversaw critical departments such as surveillance, regulation, supervision, mutual funds, and economic policy analysis. She also managed the National Institute of Securities Markets (NISM) and played a key role in shaping policies to align SEBI’s operations with international standards.
Speculations on Successors
Market experts believe that several bureaucrats and heads of market infrastructure institutions could emerge as potential contenders for the role. In the past, extensions have been granted to SEBI chairpersons like U.K. Sinha and Ajay Tyagi, even after advertisements for successors were published.
Legacy and Controversies
Buch’s tenure has been marked by both achievements and challenges. While her leadership introduced faster settlement cycles and ESG-related scrutiny, it also attracted criticism over allegations of bias and corruption. The opposition Congress party accused her of benefiting corporates, a claim refuted by Buch and her husband.
Amid the storm, corporate houses and industry bodies stepped forward to defend Buch’s reputation, acknowledging her efforts in modernizing SEBI’s regulatory ecosystem and promoting ease of doing business.
The appointment of the next SEBI chairperson comes at a critical juncture for India’s capital markets, requiring a leader with expertise, vision, and integrity. As the finance ministry seeks the ideal candidate, the legacy of Madhabi Puri Buch, both her contributions and controversies, will undoubtedly shape the discourse around SEBI’s future leadership.
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