Sinha's current tenure as Chairman of the Securities and Exchange Board of India (Sebi) is set to end this month.
"The notification for extension (of tenure) should come in a day or two. It is with the Appointments Committee of the Cabinet. All security clearances, including from the Central Vigilance Commission, have been received," a senior Finance Ministry official said.
"The extension will be for two years as laid down in the regulations," the official said.
There has been a general view that there should be continuity in leadership at regulatory authorities.
Under the stewardship of Sinha, who has been at the helm at Sebi for almost three years, key reform measures were initiated in the capital market. These include stringent disclosure norms, strict regulations for merchant bankers and the introduction of a new category of foreign investors.
In recent times, Sebi has also been active in cracking down on illegal money-pooling schemes.
In November, the Supreme Court had upheld Sinha's appointment as Sebi Chairman, saying the government had acted fairly and in accordance with the procedure of the law.
The apex court had dismissed a PIL against Sinha's appointment, observing that the petition was not maintainable on various grounds. However, it decided to hear it as the appointment to a very senior position had been challenged.
Meanwhile, there is no clarity on Sebi getting more powers to crack down on illegal investment schemes since the lapse of an ordinance promulgated twice in this regard.
The ordinance was promulgated by President Pranab Mukherjee on July 18, 2013, after the Cabinet approved amending the Sebi Act, 1992, to give the regulator more powers. It was re-promulgated on September 16.
Regarding amendments to the Sebi Act, Finance Minister P Chidambaram yesterday said it is "very high on the priority list" and had raised the matter at an all party meeting.
The minister wanted the Standing Committee on Finance on Sebi amendment bill to submit its report to enable Parliament to approve it.
"We will be doing great disservice to thousands of depositors whose money is at stake in collective investment schemes which were not adequately regulated. It's imperative that this bill is passed," he had said and regretted that there were no assurances on allowing the bill to be passed.


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