A rendezvous: CB Bhave's 3-years at SEBI

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A rendezvous: CB Bhave's 3-years at SEBI

He may have championed the cause of investor protection and cracked the whip on erring corporate houses, but SEBI chairman CB Bhave will be best known for giving the mutual fund industry sleepless nights. CNBC-TV18's Tanvi Shukla and Vidhi Godiawala wrap up his three-year term.

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show »

He may have championed the cause of investor protection and cracked the whip on erring corporate houses, but SEBI chairman CB Bhave will be best known for giving the mutual fund industry sleepless nights. CNBC-TV18's Tanvi Shukla and Vidhi Godiawala wrap up his three-year term.

It has been an eventful three years at the helm of the market regulator, most of it spent on increasing investor participation, making the investment environment safer and fair, and empowering SEBI's investigative arm.

A quick recap

Under Bhave's leadership SEBI cracked down heavily on mis-selling of financial products, enabled introduction of smart technology for trading, initiated investor awareness programmes, enabled disgorgement of IPO scam money, improved the price-discovery mechanism, introduced pre-market auction sessions and even extended market timings.

To promote retail investor interest, he also hiked the IPO investment limit to Rs 2 lakh. Tighter disclosure norms for greater corporate transparency and dealing with corporate fraud with an iron fist became a hall-mark of Bhave's tenure.

For instance, SEBI carried out investigations into the dealings of companies run by both the Ambani brothers, and pulled up these companies for the same. It also took the promoter of Pyramid Saimira and his allies to task for price rigging and punished the promoters of Bank of Rajasthan for allegedly lying to investors. It also joined hands with the RBI to warn investors against fund raising activities of the Sahara Group.

But what Bhave will most be remembered for, is initiating a mutual fund reform programme that shook the entire industry. Banning the entry load, for instance, did not go down well fund houses.

On June 24, 2010, Bhave said, "If you see distributors have two functions; one is to sell products released by the mutual fund industry and the other is to advise investors. One should pay only for the services given. So if you take investment advisory, you pay for it. That is the only rationale behind banning entry load. We also understand at SEBI that no industry works without profits."

He also took the bull by its horns, sparking off not one, but two controversial battles.

The first was with the IRDA on regulation of unit-linked insurance plans and the second, a rejection of MCX-SX's application to become a full fledged stock exchange.

And if that was not enough, he did not hesitate in speaking out for more financial and investigative autonomy for regulators.

On December 10, 2010, he stated, "Regulators by definition of their responsibility have an investigative wing. I would therefore argue that regulatory autonomy is not only necessary but essential."

Bhave leaves his successor with a crucial 'to-do list'-not least of which will be a decision on the crucial take over regulations, and the recommendations of the Jalan Committee Report on regulation of stock exchanges.