Chandrasekhar Bhaskar Bhave: Managing Bulls & Bears

Chandrasekhar Bhaskar Bhave is the new
Chairman of the capital market regulator
Securities and Exchange Board of India. He
takes over from M Damodaran, who
completed his three year term as the
Chairman of SEBI in February, 2008. This will
be Bhave’s second stint with SEBI. The 1975-
batch IAS officer of the Maharashtra cadre
was the executive director in charge of the secondary and later the primary
markets between 1992 and 1996.
That was the time when the Securities and Exchange Board of India (SEBI) was taking its initial steps
to reform the stock exchanges and putting in place systems that help in investor protection. The
Bombay Stock Exchange was then known as a brokers’ club and Bhave was on the board of the
exchange in his capacity as a representative of Sebi. It was during his stint in Sebi that his boss, G V
Ramakrishna, banned badla. Bhave also played a pivotal role in ensuring that market players get
sophisticated hedging tools and are properly regulated.
Bhave maintained that the capital market regulator’s primary job is to protect individual investors and
simultaneously develop systems that take care of the interests of issuers — companies and
intermediaries. He also ensured that the new National Stock Exchange’s surveillance systems were top
class.
Bhave is known to be a tough administrator. As the head of the National Securities Depository Ltd
(NSDL), he revolutionised the capital market by getting market players to accept the new system of
dematerialised shares and debentures.
He won buyers' support by arguing that demat would eliminate bad deliveries of shares and impressed
upon the sellers that this would facilitate early settlement and early payments. Setting up of a
depository that converts physical share certificates into electronic form was a challenging task but the
NSDL achieved paperless trading within just three years, the fastest in the world.
All this experience will come in handy when Bhave takes over as the sixth chairman of SEBI. For, the
challenges are many as the investment climate is much more dynamic now than when he was the
executive director.
He is also coming in at a time when the market sentiment is not favourable for small investors and
many of them have had huge losses in some of the recent high profile IPOs. Short selling and physical
settlement in derivatives are the other issues that Bhave will have to grapple with soon. The allotment
and listing process also needs to be speeded up to safeguard the interests of small investors. Analysts
say his predecessor M Damodaran has ensured that the homework for all these is ready and it is up to
Bhave to “implement” them.