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SEBI's surplus transfer
Why is it in the news?
- The government has proposed an amendment to the SEBI Act to transfer surplus money with the Securities and Exchange Board of India (SEBI) to the Consolidated Fund of India (CFI).
- The government’s proposal to transfer surplus money has met with a strong opposition from the regulatory body.
More in the news
- As per the proposed amendment to the SEBI Act, the SEBI would constitute a reserve fund and 25% of the annual surplus of the general fund would be put in the reserve fund.
- Further, the size of such reserve fund cannot exceed the total of annual expenditure of the preceding two financial years.
- SEBI's concerns:(1) The proposal would result in compromising SEBI's “autonomy and its ability to function effectively” towards the progress and development of the Indian securities market.(2) The proposal was “regressive” especially since the SEBI did not have any mandate to raise revenue for the government.
- General Fund:(1) The general fund of the SEBI, which currently has a balance of over ₹3,000 crore, is used to meet the expenses of the regulatory body, including salaries and allowances.(2) The fund gets money via charges that the SEBI levies on market participants in the form of registration or processing fees.
- SEBI:(1) SEBI is the designated regulatory body for the finance and investment markets in India.(2) The board plays a vital role in maintaining stable and efficient financial and investment markets by creating and enforcing effective regulation in India's financial marketplace.(3) It was established in the year 1988 and given statutory powers on 30 January 1992 through the SEBI Act, 1992.
Source
The Hindu.