Ajay Tyagi, the new chairman of the Securities and Exchange Board of India (Sebi), has inherited one of India’s best regulators. While Sebi deserves credit for what it has achieved in the past 28 years, there’s still much left to be done. Being among India’s best regulators isn’t a laurel to rest on, especially given the poor state of affairs at most other regulators. As pointed out in this column, Sebi is now in the so-called mature phase of the lifecycle of a regulator. It has nothing much original left to do, and is left mainly with the painful and thankless job of enforcing regulation.
Sebi has been evidently busy with enforcement; but far too busy for its own good. A senior Sebi official says the regulator has jumped into far too many cases, many of which have been challenged at the Securities Appellate Tribunal, and it has become clear that it has bitten off more than it can chew. This is reflected in some cases where Sebi investigations have been shoddy and have been overruled by SAT. Worse still, the Tribunal has reprimanded the regulator on more than one occasion for shoddy investigations, even saying that Sebi’s conduct has been disgraceful.
