If the raison d'etre of the Securities and Exchange Board of India (
Sebi ) is to protect investors' interests, the outgoing chairman Chandrasekhar Bhaskar Bhave stands out as one of the leading crusaders for the same. He also proved his mettle as a person with no fear or favour by bringing several industry bigwigs, to book for violating regulatory norms.
The most contested decision of Sebi, under the stewardship of Bhave, is the ban on entry loads (charges deducted from investments towards issue costs of scheme) of mutual funds (MFs).
Bhave's three-year term at the Sebi comes to a close on Thursday. U.K. Sinha, an IAS officer and currently chairman of UTI Mutual Fund, is set to succeed him.
Before the ban, the MF industry thrived on new fun offers (NFOs), with agents asking their clients to switch schemes, with the intension of garnering higher commissions.
This used to eat away 2-2.5 per cent of the investments of gullible investors even before they were invested. The ban 'would be killing the industry' that was just acquiring critical size, MFs had claimed. But, the Sebi did not budge from its stand.
In the same breath, Bhave took up the cause of the MF industry for removing the factors that were putting the mutual funds at a disadvantage compared to unitlinked insurance plans (ULIPs).
Bhave sought to bring the regulatory control of ULIPs under Sebi's oversight from that of the Insurance Regulatory and Development Authority (IRDA), citing they are equity instruments.
Though the battle seemed to have been lost when IRDA retained control of the ULIPs, the war was won by Bhave as IRDA had to rationalise the high commission structure. The move had helped insurance investors too, to save money, besides bringing a semblance of a level playing field for mutual funds vis--vis ULIPs.
Bhave's tenure at Sebi will also be remembered for the cutting down of the span of public issues and introduction of ASBA (Application supported by Blocked Amount). The time taken for initial public offerings (IPOs) was brought down to a third from 120 days earlier.
ASBA enabled public issue applicants to keep their money in their accounts till the allotment of shares. Earlier, issuers used to corner interest arising from application money.
Thus, Bhave joins the ranks of legendary Sebi chiefs of yore like G. V. Ramakrishna and D. R. Mehta, who are remembered for their contribution towards protecting the interests of investors.
Though known to be upright from his days with the National Securities Depository Ltd (NSDL), the soft-spoken Bhave never exposed the grit he is made up of. That helped him to bring to book some industry bigwigs like Subrato Roy's group and Anil Ambani's group for violations, besides nailing several promoters of companies for price rigging in the stock market.
Like any other head of an institution he had to face concerted criticism for not granting permission to MCX Stock Exchange (MCX-SX) to start equity and other trading platforms, citing not following the prescribed shareholding norms.
He was dubbed as favouring the National Stock Exchange (NSE), the parent of NDSL. During his tenure trading hours were extended by 55 minutes by advancing the starting time to 9 am from 9.55 am. The first Indian Depository Receipt (IDR) issue also materialised with an issue by the UK-based Standard Chartered Bank.
Courtesy: Mail Today 
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