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Centre rejects SEBI plea to amend provision for transferring reserves
Why is it in the news?
- Finance Ministry has refused pleas from the SEBI to amend the provision that mandates that about 75% of its surplus be transferred to the Centre’s coffers.
- The government had 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
- The Finance Bill 2019, passed by the Lok Sabha on Thursday, has a provision stating that the SEBI must set up a reserve fund into which 25% of its surplus is to be transferred.
- The remaining amount is to be transferred to the Centre.
- SEBI's concerns:
- 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.
- The proposal was “regressive” especially since the SEBI did not have any mandate to raise revenue for the government.
- SEBI:
- SEBI is the designated regulatory body for the finance and investment markets in India.
- 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.
- It was established in the year 1988 and given statutory powers on 30 January 1992 through the SEBI Act, 1992.
Source
The Hindu.