Next Sebi head unlikely to be from private sector, Centre keen on govt official: Sources

Sebi bhawan (Courtesy: PTI file photo)

The Centre is unlikely to name an individual from the private sector as the next chairperson of the Securities and Exchanges Board of India (Sebi), given a growing consensus in favour of a government official for the post, people familiar with the development said.

Several applications have been received for the Sebi Chief’s post, the people said. Last month, the Ministry of Finance invited applications for the post of Chairperson for the stock market regulator by February 17 as Buch’s term ends on February 28.

“For the next chairperson, there is a preference for a candidate who has been involved with the government, an insider,” one of the people said.

The current head of the market regulator, Madhabi Puri Buch, is unlikely to get an extension after her stint ends in February, the people cited above said, requesting anonymity.

In 2022, Buch, a former whole-time member of Sebi, not only became the first woman to head the market regulator but also the first person from the private sector to serve as the chairperson of the entity.

Buch assumed the role of Sebi chairperson on March 2, 2022, for three years ending on February 28. Prior to this, she was a whole-time member at Sebi for five years from April 2017 to March 2022.

Though an extension seems unlikely for Buch, her predecessors, such as UK Sinha and Ajay Tyagi, served as Chairmen of Sebi for six and five years, respectively.

The plan to name a government official as the next Sebi head flows from the understanding that it is easier to make background checks for those who served in any capacity in the bureaucracy, the person said.

“It is just easier to go for a government official for such a post; there are fewer chances of conflict of interest,” a second person said.

Buch’s tenure as Sebi chief was marked by allegations of irregularities—initially from short-seller Hindenburg and later the Congress party.

Moreover, a section of Sebi employees has accused her of creating a ‘toxic work environment’, though that matter has now been resolved.

Buch has denied the allegations.