SEBI’s retrospective multi-fold salary hike for employees unleashes widespread anger and disbelief
Moneylife Digital Team 01 November 2010

Market participants struggling under SEBI’s autocratic rules have been left smarting as the market regulator proposes unprecedented doubling of salary for its employees with retrospective effect

Market regulator Securities and Exchange Board of India (SEBI) has proposed to almost double the salaries of some employees, with retrospective effect from November 2007, according to some media reports. Not surprisingly, this has come as a rude shock to various market participants, including intermediaries and investors, who are facing the brunt of SEBI's shoddy attempts at changing the investment landscape in the country.

A series of ill-conceived initiatives on the part of SEBI to improve the regulatory framework in the securities market has left participants in the lurch. Intermediaries in the mutual fund industry have been left gasping for breath after SEBI removed the entry load on mutual funds, effectively taking out the incentives for distributors. This was followed by a whole set of regulatory changes that have altered the structure of the industry.

The result is that half the independent distributors in the country have either been wiped out or are struggling for survival. It is hardly any surprise then, that intermediaries are cursing the regulator for even considering such a fat pay-day for its employees. An intermediary remarked on the Moneylife website, "On the one hand, distributors are struggling for livelihood as small investors are no more interested. On the other, we have this Diwali bonanza for employees. This is (the kind of) justice (we get) in India."

The fact that SEBI has proposed to implement the salary hike with retrospective effect has raised eyebrows even higher. This is an unprecedented payout for a government organisation that is supposed to work for the benefit of investors. There are fears that SEBI's move will now be followed by similar proposals from other government institutions. No doubt, if this proposal goes through, others will look to line up for fat paycheques for their own employees.

Already, SEBI has among the best perks in the business. Officers from the income-tax and enforcement directorate are queuing up for job opportunities in this glamorous organisation. Why will they not, when it offers all kinds of benefits in terms of housing, travelling and what not. Investors are particularly incensed as all this comes against the backdrop of poor quality of work done by SEBI officials in the past few years.

An investor, Amit Bhargava, told Moneylife, "I fail to understand why the tax payers be burdened with this excess expenditure on the salaries of officers who have miserably failed to perform and as per my own experience are working against the interest of the investors and harass them when complaints are made. Such officers/organisations need to be punished rather than gifted with such retroactive salary hikes that even make the salary of the cabinet secretary look small."

Moneylife had earlier pointed out how SEBI went against the very grain of its existence to implement an 11-times hike in its arbitration fees that could actually deter investors from seeking justice. Such and more moves from the regulator have not gone down well with the investing public. SEBI's decision to reward itself with such opulence in the light of the work done has shocked investors to the core. We wonder how the powers-that-be at the finance ministry are going to react to this proposal.

1 decade ago
SEBI gave salary hike to its staff with retro effect.
Thank God, they did not abolish commissions to Mutual Fund Agents with retro effect.
p y k
1 decade ago
jai ho bhave ki. apna bhav badha raha hai~!! in a cheap way. in any other well govrned nation , these b*********,m********kr wd be fired and put behind bar. in india EVRYTHING IS NEGOTIABLE.
let us see some more "nautanki " here.
R Balakrishnan
1 decade ago
Reminds me of what a government employee told me in the early seventies -- " I get my salary from the government for sitting on this chair. If you want your work done, you pay me". With this kind of an approach, it makes me wonder why they need any salary at all?
1 decade ago
Dear Tanu,

With all due respects to you, I have to say that you are bringing personal animosity in this issue. I dont care if Sucheta was thrown out of any panel or not. The moot point here is she has pointed out something which is very wrong on the part of SEBI.

Zero cost to invest is not investor friendly.

Zero manipulation in the market is investor friendly. Steps taken to grow the market is investor friendly. Efforts to broaden the market by making millions of Indians in the equity market, either direclty or indirectly is investor friendly.

On all these counts SEBI has failed and has failed miserably. Do you even know what happened to people like C R Bhansali etc., who created havoc in the market? When SEC can conclude legal proceedings and put behing people like Madoff behind bars in as little time as possible, what is SEBI doing for more than two years since the Satyam scam broke out??

Coming to the question of increasing the base of investors, what has been SEBI's contribution in this? The first step for a lay investor to get into the stock market is mutual funds. With its short sighted approach in the garb of investor friendliness, SEBI is in the process of killing this indusrty. Where is the question of broadbasing the market?

I have no issues if competent people get paid. The question is, is SEBI full of such competent people?
1 decade ago
Does any body know that Sucheta Dalal was thrown out of SEBI Committees for mouthing her anger at the security staff. Critisism on regulators should be constructive not blatendly one sided. If Sucheta do not know, retospective pay revisions are the order of any govt. organisations. If you remember properly sucheta had not critisized the just concluded pay revison of central govt. SEBI's revison is in line of RBI, which has also revised in the same lines. The pathetic view is that govt. employees should not be paid, however qualified they are. If I understand correctly, SEBI in a short span has shown the world, where India belong, and had changed the market to investor friendly. The same people had done that.
Madhusudan Thakkar
Replied to Tanu comment 1 decade ago
Tanu comments about Sucheta Ji represent smacks of arbitrariness at best and pettiness at worst.

In today's "Mint" there is report about how SEBI rules are crippling the Industry[including intermediaries].Except Moneylife media has not been kind to role intermediaries.
This is not the way to run SEBI.We feel cheated-our commitments to our own conviction and ideals -also stands diminished.We begin to doubt about lofty goals and thoughts.We have become victims of cynicism.Even brightest and most idealistic amongst us might conclude that "different path" is needed.

Media[except moneylife] has brazenly rationalised role of intermediaries as "villans".Business news today is sleight of hand.Paid news,private treaties with advertisers celebrity coverage for fee is order of the day.PR feeds masquerading as reportage,business story to serve the stock market.THE DESERVING STORY NOT DONE.Investigation and expose when it happens is because someone had a score to settle.Instead of agenda-setters journalists have become handymen,well paid but increasingly adrift from the craft and ethics of their trade.So where does that leave NEWS as we knew?.The story followed for its objective worth?The based on verified fact and authentic source?That require legwork,questioning and research?.Instead of examining,probing and deliberating on many aspects they are indulging in petty deceit.

It is here MONEYLIFE is like "Breath of fresh air".
Replied to Tanu comment 1 decade ago
Dear Tanuji,
yor comment of some one being thrown out from commitee for making anger on security seems like a laugh-is this a constructive or rational to criticise someone with such silly issues?with reducing retail participation of investors in stock market-i am of the firm opinion that present staff and officers of SEBI should be demoted and their salries should be reduced to half-bcos they are useless fellow who are corrupt and working against the interest of common retail investor-pay revisions for all central got employess is a issue which this corrupt country is seeing with anger-bcos MP's have increased their perks and salaries 3 times and so not surprising that thay will give a 'BOTI"dog's bite to their puppets-ie beurocracy-but listen the common people of this country all seeing all this with angeer and pressure is mounting inside masses-some day in near future it is going to explode-may be many politicians and beurocrats will be massacrd by their own security guards-so just have some fear of that day-
sucheta Dalal
Replied to Tanu comment 1 decade ago
How interesting that SEBI's insiders are showing their claws. I can name five people in SEBi who would probably be responsible for posting this cheap comment. Your IP address shows that this email has come from SEBI Bhavan.
Yes, I was on SEBI's primary market advisory committee. And sure, i was thrown out. i think it is a badge of honour not something I am embarassed about. I raised questions on the committee that were uncomfortable about how SEBI was hell bent on twisting rules and changing them to the detriment of investors.

About the altercation with SEBI security staff. I must put that in perspective too. Yes indeed there was an issue that I took up with SEBi's PR and its then Chairman.
SEBI had this bizarre policy of making its invitees, including committee members to get off outside the gate and run through the rain to attend its meetings.
All over the country, including high security places like North Block and South Block in Delhi which house the Finance Ministry and the Prime Minister's office, allow visitors (especially committee members) to drive up to the gate. After all, we were not going to SEBI to get some clearances or be part of a paid job, nor were we employees. This was pure pro bono work.
After my objection, SEBI has slowly changed the rules. They have even begun to issue passes to the media and to committee members.
The other committee members who were there that day thanked me for taking up the issue. They also said that as regulated entities on the committee, they have to put up with the phenomenal arrogance of SEBI's staff and can do nothing.

Why intermediaries and committee members, SEBI used to treat investors just the same. The reception area which is the size of two football stadiums did not have a single chair for an investor, who cannot enter the gate without an appointment.
That too changed when we wrote about it repeatedly.
So if you insist that SEBI threw me out because of an altercation with security, rather than (as I believe) issues of policy, then i am proud of that too.

Government employees must learn to do their jobs well and be of service to the people. Government employees must also learn that they cannot usurp the powers bestowed on them to harass constituents. Why did it not pinch the conscience of a single SEBI officer when tens of thousands of IFAs lost their livelihood overnight? And yet, look at the nastiness when it comes to their own salaries!!

Replied to sucheta Dalal comment 1 decade ago
sebi employees are doing the world a big favour in coming and signing the muster. they need to be paid separately to work which involves kicking investors and market intermediaries in their face. files remained unattended for months which inflicts a huge cost. then of course, brazen corruption. one guy in kolkata was caught demanding a bribe. the other was forging letter from within sebi's premises - all under the current chairman who has surrounded himself with people who will rescue him from the nsdl scandal! Of course, everyone's salaries have to hiked manifold to secure consent for this brazen operation. by the way, i wonder what this so-called Tanu has to say about sebi's throughly compromised "consent" orders. salary must be a small component of your income, Tanu. why bother to post here? enjoy life
Replied to Tanu comment 1 decade ago
When our MPs vote to double their salaries and perks, SEBI also follows. Bhave had ensured that his pension will be double, post retirment in Feb, unless he gobbles another prime post elsewhere in the various govt organisations. SEBI should be justly rewarded for killing the IFAs, small investors and Mutual Fund Industry in that order. Indian stock market has become the gambling den of FII and NSE and BSE brokers and SEBI is also killing any competition to these exchanges. Dont you agree all this would further the spread of equity culture in India and would be true financial inclution of the common man. SEBI is mandated to do this and are doing a GREAT JOB. why not recognize it and reward them amply.
1 decade ago
ab Bhave ki naitikta (moral) gayi tel bechne. dekho Pranab Da jagte hain ke nahin
girish prasad
1 decade ago
ramchandra kah gaye siya se aisa kalyug aayega,

hans chunega dana tinaka kauva moti khayega.

be ready for all ifa for ban on trail an 100 times rise in regdn fees .
1 decade ago
This is SUPARI for killing mutual fund industry.SEBI will celeberate diwali when there will be darkness in distributors homes..MERA BHARAT MAHAN.
Replied to Yogesh comment 1 decade ago
they are also throwing small investors from MF industries and blaming on distributers.geting funds and support from goverment on name of small investors benefit but hammering to them
1 decade ago
corrupt politicians and beuorocrates ate up the land which was to be given to families of Martyrs of Kargil war-the whole building has been eaten up by money hungry politicians-the savers of this country have become like beggers-remember this is height of the situation-if our soldiers wont have faith in our system-this country will soon be a slave country-i have my education in army and navy bases-and i can see that we are going for a explosion any time-may be china war or pak war-and no one will sacrifice their life for these corrupt rulers-we will fail as a nation very soon if things continue this way-
Rambabu Shastri
Replied to Roopsingh comment 1 decade ago
The triad of Pak-China-Bangladesh is soon heading India's way. Corruption has eaten into our country to such an extent that people will pay to get defence or security for themselves. There is no honesty left among those in power. None of them can fathom the rise of the Islamic Caliphate. At least, in Saudi, there is Islamic jurisprudence and people do not muck with the law. I expect there will be rise and rise of Islam from now on. Read the Prophecies of Nostradamus. As it is, people like Arundhati Roy, to sell a few more copies of their books are ready to shock people into garnering eyeballs to make more money and support secessionist elements. The root cause.... CORRUPTION and GREED of the political class.
1 decade ago
India is repeating the old story of Hipocracy and Anarchy-TAKE SHER BHAJI AUR TAKE SHER KHAJA-means no justice to hard worker-sweet maker will sell sweets at rates o Bhaji pala-and Donkeys have dresses them up better then horses to get more incentives and attention -This is sure sign of collapse of this country-this country will fail as a nation because justice is getting rarer and people are loosing confidence in authorities-corruption is the custom of this so called Great india-and i am damn sure we are going to fail as a nation sooner rather then later.
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