Selecting the right person to helm the market regulator

The person selected for the top job should bring to the table a clear understanding of the concept of functional autonomy, and the courage of conviction to take a stand in the case of the government trespassing into regulatory territory

- M Damodaran

The term of the current chairperson of the Securities and Exchange Board of India (Sebi) comes to an end on February 28, 2025. On January 27, 2025, the Government of India invited applications from eligible candidates for filling up the post. Even after the invitation was issued, there has been speculation on whether the incumbent would get another term or a short-term extension. The relevant rules envisage another term. However, extension is, by implication, ruled out since the rules state that the person concerned shall hold office for a period not exceeding five years, but shall be eligible for reappointment. Therefore, another term can result only by way of reappointment, and not by extension.

All this could be idle speculation. Newspapers have reported that applications from some persons who consider themselves eligible have already been received. What is, however, worrisome is the fact that the last date for applications was February 17, 2025, with the term of the incumbent expiring on February 28, 2025, there might not be enough time for the selection committee to interact with all the candidates meaningfully, make their recommendations, and thereafter for the government to obtain the approval of the appointments committee of the cabinet. It is this tight time schedule that has given rise to speculations of a short-term extension.