My 2 years at SEBI as SEBI celebrates 25

Unlike other pieces I write, I wrote a personal piece about some of my learnings at SEBI. While others are busy telling SEBI how it needs to improve - I focused on how SEBI improved me instead. Here is the piece from the Financial Express.

Though it still has a long way to go, it is time people acknowledge Sebi’s distinct contribution to India’s capital markets

While there will literally be dozens of columns and op-eds written over these few weeks instructing the Securities and Exchange Board of India (Sebi) how it should perform better, I will resist the temptation to be didactic or academic. So, I will try to focus on my learning from Sebi instead. I hope this column will at least make intelligent people think about joining the public sector, specifically financial regulators, instead of sitting on the sides.

I was amongst the first persons from the private sector to join Sebi. My first few days were clearly less different than I had expected them to be. From a private sector law practitioner to becoming the head of legal affairs and enforcement departments at the securities regulator sounds like a big change. It wasn’t. Or so I thought.

The three areas that were different were the client, the process and the impact. My initial days weren’t different from being a securities lawyer. I continued to express my views and opinions on legal subjects in the arena of the securities markets. Except, I didn’t have external clients. My clients were the other departments of Sebi, the board members including the whole-time members and the chairman. Given the nature of the work, i.e. legal views, most of it happened through files and in writing, not through oral views. Oral legal views are not worth the non-paper they are not written on.
This gets me to the first humbling experience—a respect for process. In my early days, I transported my private sector efficiency into the job. To give an instance, a file which came from a department (in Sebi lingo ‘operational department’) for an opinion which had an obvious view, would get my individual comments and sent back to the department. Turnaround time, two minutes. Like Maggi, this wasn’t the healthiest of ways. This efficiency was not only a bad idea but a disrespect of the process. The better way to do this would be to send the file down the ranks, get inputs, ideas, legal commentary and then take a final call before sending it back to the operational department.
This came at a cost, simple decisions which took two minutes would now take a week. The benefits were less clear, but did become clear as I became wiser. Sending the file to my colleagues meant the view was not an individual’s, but an institutional one of the entire department. It meant that people in the legal team were aware of the issues which the other departments were grappling with. It meant that I was exposed to differing views, sometimes contradicting my own, often altering mine. It meant I could see multiple views where earlier there was only one. It meant there would often be meetings with the other departments where the operational aspects and legal aspects would be discussed, debated and where everyone left the room wiser. Out of a diverse churn of ideas come better ideas. This is clear from multiple studies of boards of companies which show that diversity almost invariably increases performance of the board and of the company.

The third aspect was the impact. Any role, as a junior or senior person at Sebi, has a high impact on the economy. A position at Sebi can enable you to pass efficient laws, enforce the laws without fear or favour, and develop the market. Or not. We sold these dreams to young law students and urged them to convert them from dreams to reality. On a visit to the top six law schools of the country, Sebi got a rousing response. It helped that the chairman himself went to most to the schools. From one of the top three law schools Sebi attracted 19 of the top 20 students by rank. At that institute, half the batch had applied to Sebi. In fact, Sebi made offers to some 45 law students. If Sebi were to become a law firm tomorrow, it would be amongst the five biggest by numbers of lawyers employed. Most hired are still at Sebi. Most are still sold on the idea of making a difference. All of them are making a difference.

Clearly, any role at Sebi has the potential of making a big difference. And I would like to believe that with pride if with some conceit. I also think it is high time people give up their short-term interests of getting the biggest pay-check and consider joining regulatory bodies. This is good in the short term because of the difference you can make and also in the long term as the learnings you take away can never be obtained in the private sector. In the longer term, it may even more than compensate the lost pay-check that you compromised on, as private sector companies and law firms realise the huge value you bring to the table. Even otherwise, the satisfaction of making a difference will ensure that your pride factor will remain high whether you continue at the regulator or whether you leave after some years. Your contribution to improving the state of regulatory compliance and corporate governance standards in the country will mean that you will be an ambassador of Sebi for life. Just as Romans borrowed heavily from Greek mythology because they didn’t have too much of their own, the private sector can borrow a lot from what the regulator has to offer.

Though it still has a long way to go, as the most open, transparent and efficient of financial regulators in India, it is time people acknowledge Sebi’s rich history and its distinct contribution to society—and, of course, add to it with their contribution.

The author was with Sebi from 2006 to 2008 and then went into academia for two years as cooling off from his role at Sebi. He now runs a financial sector law firm