SEBI Staff Writes To FM To Maintain Its Autonomy; Opposes Move To Send 75% Of Surplus Funds To Government Coffers

The Association of Securities and Exchange Board of India has written to Union Finance Minister Nirmala Sitaraman opposing a budget proposal to government coffers by terming it as “additional tax on market participants”.

The letter has called the minister’s proposal to subject SEBI to seek government approval for its annual expenditure as “regressive”.

Earlier, the union budget had proposed that SEBI should constitute a reserve fund and 25% of the annual surplus of the general fund should be credited to this reserve fund. Moreover, the transfer to the reserve fund every year should not exceed the total annual expenditure of the preceding two years.

According to the budget proposal, after meeting all expenditures, SEBI should transfer the left over 75% of the surplus amount to the Consolidated Fund of India. The budget had also proposed that SEBI should take government approval for its annual expenditure.

According to the SEBI employees’ letter, involvement of the government in capital expenditure approval would not add any benefit to institutional efficiency but only slow down decision making. This would also be contrary to the principal of minimum government and maximum governance, the letter stated.

The letter stated that even the Comptroller and Auditor General (CAG) which audits SEBI accounts have not found a “single instance of imprudence” so far.

The latter also stated that SEBI’s capital expenditure has to be approved by its board which already has two government nominees on it.

The SEBI employees’ letter urged the finance minister to ensure that SEBI’s autonomy is maintained.