16 March 2009

SEBI and SEC funding

The corporate counsel blog reports about the damage done to the US securities regulator SEC by poor funding by the government when it needed it most. In stark contrast the Indian securities regulator faces the criticism that it is sitting on too much money. SEBI in fact runs primarily on fees collected from intermediaries etc. (and interest on the corpus of funds). In addition the Comptroller and Auditor General (CAG) has also criticised SEBI for not keeping its funds with the government and seeking appropriation on a when needed basis. Though SEBI probably has the power to keep its own funds on a reading of the relevant provisions of the SEBI Act 1992, from a philosophical perspective, a middle way between the cramped growth of SEC and limited accountability of SEBI's growth may be the best way forward.

See Times of India piece on CAG pulling up SEBI and IRDA for not keeping funds in 'Public Accounts'.

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