Home / Markets / Madhabi Puri Buch is Sebi chairperson

MUMBAI : The government on Monday named former banker Madhabi Puri Buch as chairperson of the Securities and Exchange Board of India, breaking a glass ceiling in the male-dominated field of financial regulation.

Buch will become the 10th chief of the market regulator, the first woman and the first private sector executive to head the institution. None of the other regulatory bodies, such as the Reserve Bank of India or the insurance regulator, has had a woman head. Buch, who will take charge on Tuesday, will helm Sebi for three years, the Department of Personnel and Training said in a notification.

“Breaking the glass ceiling, whether it is in private or public sector, is always fantastic. Having someone from the private sector heading a regulatory body is another good step. Financial services in India have fared better on gender diversity and women representation as compared to other sectors and when compared to global counterparts," said Radhika Gupta, chief executive of Edelweiss Asset Management Co.

Buch’s appointment comes as Sebi prepares to tackle several challenges, including clearing the mammoth initial share sale of state-owned Life Insurance Corp. of India, probing the privileged access case and governance lapses at India’s largest stock exchange and high market volatility because of the conflict between Russia and Ukraine.

Shruti Rajan, partner, Trilegal, said Buch’s appointment is a classic example of how one step can be a giant leap. “She will perhaps be the first woman at the helm of a key Indian financial regulator, and that’s an extraordinary feat. It is a heartening change in an industry where we’re seeing more women leaders on the rise," Rajan said.

Buch succeeds Ajay Tyagi, a 1984-batch IAS officer, who demitted office on Monday, at a time several agencies are probing the National Stock Exchange of India for alleged irregularities. Sebi’s 11 February order on NSE revealed governance and fiduciary lapses by NSE’s former chief executive, Chitra Ramkrishna.

“The ministry was looking for continuity as well as fresh eyes on the NSE case. In Buch, the government found both. She was a whole-time member at Sebi, and so is familiar with the NSE case, and as chairperson, she can bring fresh perspective too," said a person familiar with the government’s thinking.

Buch last served in Sebi between April 2017 to October 2021. The bulk of her stint was spent handling regulations and policies for the mutual fund industry. “She was eligible for an extension but did not seek one since she was trying for the top job," said a second person, who declined to be named.

“Her previous stint at Sebi saw a lot of policy changes in the asset management space. She also focused on prompt enforcement action, where needed. She has been both transparent and approachable in her policy and decision making, and we will surely see more of that in her stint at the helm of Sebi," Trilegal’s Rajan said.

Deena Mehta, who became the first woman president of BSE, said it is not about ‘a woman being appointed as Sebi chairperson’. “I look at it as a professionally, competent person being appointed irrespective of gender. She is as equal to any man as far as her competency is considered. Her first priority for the market has to be deregulation. We have excessive regulations, and post-covid, Sebi has been on overdrive. The market requires her to remove layers of compliance and not compromise on risk management," said Mehta, who is managing director of Asit C Mehta Investment Intermediaries.

Mehta was referring to the stringent margin rules for brokers. According to new rules, brokers need to collect the margin upfront, which increases both operational and compliance costs. It is a tough act to balance—one to ensure that broker defaults become a thing of the past and also ensure industry keeps growing. There have been as many as 20 broker defaults in the past couple of years.

Asset managers have also criticised too many stringent policy measures, including pressure to reduce costs and fund managers having to invest in their schemes.

However, many say the regulations have only made markets safer and reduced risks.

There has also been criticism that Sebi woke up too late to the crisis brewing in debt mutual funds, which blew up with Franklin Templeton India shuttering six debt schemes in April 2020. One of Buch’s major challenges would be to conclude all pending cases related to the NSE-co-location and high-frequency trading scam. Sebi’s is probing the brokers who benefited due to faster and unfair access to NSE’s algo trading platform.

Priyanka Gawande in Mumbai contributed to the story.

ABOUT THE AUTHOR

Jayshree P Upadhyay

Jayshree heads a team of reporters focussing on legal, regulatory, investigative stories. She has worked for over a decade, reporting on financial scams, legal stories and the intersection of corporate and regulatory issues. She is based in Mumbai and has previously worked with Business Standard, Mint, The Morning Context and Bloomberg TV India.
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