Parl Committee likely to summon SEBI; FinMin to submit detailed accounts of SEBI to PAC today

PAC has never called SEBI earlier.

In an unprecedented move, the Parliament's Public Accounts Committee (PAC) has asked for a detailed review of the Securities and Exchange Board of India's (Sebi) accounts for the fiscal years 2022-23 and 2023-24, the first such scrutiny of the market regulator's performance, a government official said.

The panel, chaired by Congress leader KC Venugopal and comprising members from both the ruling coalition and the opposition INDIA bloc, sought data from the finance ministry by September 27, the official said, requesting anonymity.  Although Sebi is an autonomous body, the finance ministry provides it budgetary support and also helps shape the legislative framework for India's securities market.

"The PAC has never called Sebi earlier. The finance ministry has to submit the information to the parliament secretariat," the official said. "PAC is likely to summon Sebi chairperson Madhabi Puri Buch in its next meeting. It will be a performance review of the regulator."

The PAC's role is to audit government revenue and expenditure and ensure accountability of public finances.

What is the PAC seeking?

The requested documents include Sebi’s receipts and payments, its Comptroller and Auditor General (CAG) audit report, and the regulator’s internal audit committee observations. These materials are likely to be submitted to the finance ministry on September 27, he added.

This investigation comes as part of the PAC’s review of regulatory bodies established by Acts of Parliament, introduced as an agenda item during its meeting on August 29.

The committee's focus on Sebi comes at a critical time as the regulatory body has been embroiled in controversies following allegations against Buch by Hindenburg Research of a conflict of interest regarding Sebi’s investigation into the Adani Group. The American short-seller has accused Buch of not acting independently during the investigation.

Sebi board meeting

The capital market regulator will hold a board meeting on September 30, and issues related to charges against Buch may be taken up for discussion.

The meeting will be crucial as this will be the first time the board will be meeting after he Hindenburg allegations against Buch.

The meeting may also discuss as many as 11 consultation papers floated by Sebi that have passed the deadline for public consultation, including measures related to the F&O (futures & options) segment.