U K Sinha set to be next Sebi chief

NEW DELHI/ DAVOS: U K Sinha, UTI Asset Management Company chairman and managing director, is set to be the new chairman of the Securities & Exchange Board of India (Sebi) with Prime Minister Manmohan Singh clearing his appointment. Sources involved with the appointment told TOI that the government would notify his appointment early next week. The present Sebi chairman C B Bhave's three-year term is due to end next month. It is unclear if Sinha will get a three-year term or a five-year term.

Sinha will be the sixth Sebi chairman since the regulatory agency was set up through a law in 1992. The former Indian Administrative Service Officer has been associated with the capital markets sector for a decade now, having first worked as a joint secretary in the finance ministry before moving to take over the reins of UTI.

Apart from dealing with cleaning up the sector in the aftermath of the 2001 stock scam, Sinha was one of the main architects of revamping UTI which went under due to commitment to offer assured return schemes and wrong investment decisions. Apart from the bailout, the government split the erstwhile Unit Trust of India into two entities, one dealing with the assured return schemes while the rest moved to what is now UTI AMC.

In addition, Sinha has been involved with preparing the roadmap for developing the bond market, something that he would be associated with once he moves across the road from the UTI headquarters in Mumbai's Bandra Kurla Complex to the Sebi head office.

State Bank of India chairman O P Bhatt says it's one area that needs urgent attention. But Bhatt is not alone. In the absence of a well-developed bond market, developers of long-gestation projects have to rely on bank funding, creating pressure on the system. Hero Corporate Services chairman Sunil Munjal adds further techonological development to the list. In addition he says that Sebi should clear the air on entry of new players in the stock exchanges business. The area has become a big controversy, especially in the wake of the Bimal Jalan committee report which among other things has proposed a cap on profits and restrictions on listing. That will be one of the first few things on the table.

Sinha had recently headed a committee which sought to provide greater clarity of portfolio flows and that's something where he will have to advise the government. He will have to act on increasing the reach of equity MFs as they have been relying heavily on debt to shore up their assets under management (AUM).