Assocham president KP Singh said in a statement that Sebi should play promotional role for focused growth and development of the capital market. This aspect unfortunately has taken a back seat in Sebi's agenda, he said.

The Sebi board of directors need to be broad-based to have 50 per cent representation from amongst eminent persons from the capital markets (stock brokers, merchant bankers, mutual funds and the like), industry and investor bodies having vast practical experience at the ground level.

Its government-appointed directors should be wholetime directors who can devote full time. He said while most of the security exchange boards around the world have been restructured in the recent past with a provision for a representative mix of all financial intermediaries on theirboards, Sebi has been an exception.

The restructuring, the Assocham chief said, has been necessitated in order to have representative opinions of the problems experienced by every financial segment for better functioning of the capital market.

Though Sebi has been patterned on the lines of Securities and Exchange Commission of the United States, the concept of having a proportionate mix of all financial intermediaries on the board has been missing. Singh said the chairman of Sebi board should be elected by the board and be non-executive chairman, Sebi can be managed by a CEO, reporting to chairman and the Sebi board, who can be a whole time employee of Sebi besides other senior officials having enough background and experience of capital market.

Each non-executive member of the Sebi board can be given overall responsibility of a selected sector of the market, its revival and regulation eg. primary market (including revival), secondary market, mutual funds, foreign institutional investors,investorsgrievance and prosecution of erring promoters, international market and debt market.

The government, Singh said, should also consider restructuring of the board of directors of all the recognised stock exchanges so as to include proportional representation from stock brokers of the concerned stock exchanges, representatives from industry to be nominated by national level industry bodies for the BSE/NSE and the local industry bodies on the regional stock exchanges, and chartered accountants to be appointed by the Institute of Chartered Accounts of India. Representatives of Sebi, Ministry of Finance and RBI should also be nominated to the board.

The proposed restructuring of the stock exchange boards will ensure improvement in market surveillance and proper regulation of non-transparent methods which affect the stock market in short, medium, and long term.