* Two finance ministry sources confirm two-year extension
* Sinha expected to keep up efforts to reform markets
* Challenge seen in implementing new rules
By Himank Sharma and Manoj Kumar
MUMBAI/NEW DELHI, Feb 6 India has extended
Upendra Kumar Sinha's tenure as chairman of its securities
regulator, two senior finance ministry officials said, giving
him an extra two years to achieve reforms including bringing
more transparency to stock markets.
After taking the job at the Securities and Exchange Board of
India (SEBI) in 2011, he unveiled rules to improve corporate
governance and disclosure standards at Indian companies and has
been tasked with instituting a law to counter insider trading.
India is trying to lure back retail investors after markets
were hit by the global financial crisis in 2008, eroding the
trust of ordinary Indians who have pulled nearly $5 billion out
of equity funds since then. Last year the government granted
SEBI more powers of investigation and enforcement, including the
right to see phone records and to conduct raids.
Critics say some of Sinha's rules go too far, while others
fear that his reforms may not be backed by meaningful action.
He has tried to reduce the clout of controlling
shareholders, who have traditionally called the shots in
industry in India, and has asked exchanges to beef up their
compliance departments and unveiled proposals in December to
toughen 20-year-old insider trading rules.
"He has been doing a lot of things that will ultimately
create vibrant capital markets in the form of reforms in the
stock markets and his current focus on the debt markets," said
an industry executive, who asked not to be named.
"But he has his work cut out for him to see all these things
are implemented well."
Sinha has also been accused of being draconian.
His rules aimed at countering mis-selling in the mutual fund
industry were blamed for stymieing growth and exacerbating
redemptions by putting what executives say were excessive
restrictions on commisions paid by funds to distributors.
His push to protect small investors has also led him to a
high profile battle against the Sahara conglomerate, one of
India's biggest business groups and a household name due to its
sponsorship of the national cricket team.
Sinha is expected to keep working on making markets more
sophisticated. Under him, SEBI has allowed bond trading on
exchanges, and along with the central bank, relaunched bond
futures after two failed attempts.