The government will likely retain the one-year cooling-off period for the Securities and Exchange Board of India (Sebi) chairperson and whole time members before they can take up positions with market participants, instead of extending it to two years as suggested by a Parliamentary panel.
The government is also unlikely to act on the recommendations of the Standing Committee on Finance to examine the need for an appropriate statutory and regulatory framework for virtual digital assets (VDAs), or crypto assets.
The panel, which recommended several changes to the securities markets code in its report tabled in Parliament on July 23, proposed extending the cooling-off period for the Sebi top brass from the extant one year to two years before they can take up positions with market participants.
Even with a one-year cooling-off period, it is difficult to find good candidates from the private sector to serve on the Sebi board, official sources said. So, extending the cooling-off period would make it harder to attract suitable candidates.
In fact, before the Bill was presented to Parliament, the government had been considering extending the cooling-off period from one year to two years. However, it decided against the move after market participants cautioned against it.
The Parliamentary committee had also recommended that the government comprehensively examine the need for an appropriate statutory and regulatory framework for VDAs. Pending such a framework, the government may consider recognising a self-regulatory organisation (SRO) for VDA service providers under a tailored supervisory arrangement with the designated regulator.
It also recommended prescribing minimum standards for governance, transparency, disclosure, investor protection, grievance redressal and regulatory oversight to mitigate risks arising from the existing regulatory vacuum and safeguard investor interests.
However, sources said the government has no plans to introduce a regulatory framework for VDAs, as they are not backed by real assets and are viewed as a threat.
Cryptocurrencies are decentralised networks based on blockchain technology. This decentralised structure allows them to operate outside the direct control of governments and central banks.
Like many countries, India does not have a dedicated regulatory regime for cryptocurrencies, although they are covered under the tax net.