The year 2022 saw three key personalities heading India’s most influential market institutions. Madhabi Puri Buch, since March, heads the Securities and Exchange Board of India, widely known as SEBI. In July this year, Ashish Chauhan took over the reins of the National Stock Exchange (NSE). BSE, which was headless after Ashish Chauhan left it to join the NSE, recently appointed Sundararaman Ramamurthy as its MD and CEO.
These appointments come at a crucial time for these prestigious institutions to take Indian stock markets to new heights, as participation from retail investors has been increasing steadily.
Tasks at SEBI
For Madhabi Puri Buch, the first woman and first non-bureaucrat to head SEBI, the challenge is on market integrity, though the main task is to fix and check manipulation by market participants and coming out with remedies to prevent such manipulation.
Another important challenge is breaching the Securities and Appellate Tribunal wall. Most orders passed by SEBI members tend to be watered down by SAT in recent times, which either sets aside or lowers the SEBI penalty. It is high time SEBI looked into the matter holistically and passed watertight orders that stand scrutiny from SAT.
Checking cybercrime and upholding systemic integrity (primary, debt and secondary markets) constantly are other priority areas. The smooth rollout of T+1 will be the first challenge for the SEBI chief. No doubt, with Buch’s domain expertise and her experience with ICICI Securities, she’s well-placed to handle challenges faced by the regulator.
Fixing NSE’s image
For Ashish Chauhan, boosting the image of NSE is the most tough act. The world’s largest derivatives trading platform by volume is affected by corporate governance and legacy issues after the unearthing of co-location and illegal phone tapping case during the tenure of former NSE chiefs Chitra Ramkrishna and Ravi Narain.
The NSE has been planning to come out with an initial public offering. The much-touted IPO may see the light if Chauhan is able to convince investors that the governance structure at the bourse has been fixed.
BSE’s marketshare
For Sundararaman Ramamurthy, the major task is to revive the marketshare of BSE, both in the cash and derivative segments. NSE is the dominant force in markets with a near monopoly marketshare of over 90 per cent in the F&O segment.
Ramamurthy, who was one of the major brains behind the launch of indices of the NSE, especially Bank Nifty, is the best man suited to tone up BSE’s marketshare.
“India has the conditions in place for an economic boom fuelled by offshoring, investment in manufacturing, the energy transition, and the country’s advanced digital infrastructure. These drivers will make it the world’s third-largest economy and stock market before the end of the decade, we estimate,” Morgan Stanley said, in its recent “Why This Is India’s Decade” report.
With strong personalities at the helm of key market institutions, this prognosis may come good sooner than later.