Need to cap regulatory authorities; Damodaran (with DI

New Delhi, Aug 9 (UNI) Giving a clear impression that the market regulator lacks functional autonomy, SEBI Chief M Damodaran today made out a case for regulators being made directly accountable to Parliament to achieve this end.

''Why should a Minister have to stand up in Parliament and be held accountable for the acts of a regulator,'' Mr Damodran said delivering the tenth J R D tata Memorial lecture here. The lecture was organsed by ASSOCHAM.

Mr Damodaran said if a regulator is directly answerable to Parliament, he will be functionally more independent than if he has to report to an administratuve ministry.

The SEBI Chief said the administrative ministry is often like a democles sword on a regulator and thus there was need for providing greater functional autonomy.

Mr Damodaran said he, however, was not dependent on any administrative ministry for any sanction as the funds of the market regulator come from the proceeds of the SEBI General Fund.

Referring to the multiplicty of regulators, Mr Damodaran said there needs to be put an embargo on further mushrooming of the regulatory bodies.

The SEBI head was desirous that a strict qualification critrea be prescribed for the appointment of a regulator so that he is able to discharge his duties effectively.

''At present, anyone with any kind of qualifications can be appointed a regulator. There was also the need for the process of appointment being made more transparent,'' he said.

Mr Damodaran said the Securities and Exchange Board of India is governed by a number of legislations, such as the 1934 RBI Act and the 1994 SEBI Act. It was thus important to clear the cobwebs in this regard.

He said SEBI was involved in a constant process of simplifying rules and regulations so that they do not become a playground for lawyers.

Mr Damodran said most regulatory authorities are not single member bodies, even though this is often the percpetion among the lay public. Regrettably, he said, it is often a single person who hogs the limelight.

He decried the measly renumeration paid to the regulators which was totally out of tune with the market realities.

However, he said, SEBI has been able to attract a lot of young talent on the basis of campus recruitments even under the existing wage structure. However, after serving the Regulatory body for some time, they often seek jobs in the market. "The market then is willing to pay them the Kings ransome", he said.

In reply to a question, Mr Damodaran said he was engaged in writing a book relating to the stock markets and his experience of being a regulator. In a lighter vein, Mr Damodaran, however, said: ''for reasons of my disability of being a regulator I can only publish the book after I leave this office.'' UNI GS MSJ RAI2116