The Securities and Exchange Board of India (SEBI) will begin easing procedural rules from its upcoming June board meeting in its move towards optimum regulation in the capital markets, said Chairperson Tuhin Kanta Pandey in an interview with businessline.
“We’ll have to bite in pieces… some of it will be in the June board meeting itself, and we’ll keep doing it board by board,” said Pandey. “The early pickings are areas where there is no risk but an additional burden on the industry. Those can be removed.”
The first wave of changes will target rules that add compliance burden without contributing meaningfully to risk mitigation. “Many times there are procedural issues, which are not risk related issues and may not be contributing to any risk mitigation either. These processes may simply be an over-cautious approach, where we can over prescribe things and contextually not take it away later,” Pandey said.
Gradual easing
SEBI is working closely with stakeholders to identify such areas and clean them up through a consultative approach. The idea is to maintain stability in regulations in normal circumstances, unless warranted in case of drastic instances. “There should not be too much of a flip-flop, where we hurriedly do something and then suddenly we find out that this was not to be done,” he said.
The market regulator is working on harmonising its threefold mandate: development, regulation, and investor protection. While acknowledging that some aspects of the regulatory framework may need a complete rewrite, Pandey said it is taking into account the differences of opinion within different sets of stakeholders.
“My mandate is to take a balanced view of this. While institutional development is important for the growth of the capital market, it cannot be one sided,” Pandey said. “Which is why I never said ‘deregulation’, because an ‘optimum regulation’ is the way to go.”
SME watch
The markets regulator is watchful of egregious behaviour in the small and medium enterprises (SME) segment, and will intervene when systemic gaps bring risks. “One or two cases will always happen, no matter what. But if there is any system build up, where checks and balances are not put forward, then we will step in to mitigate risk”
SEBI is also ramping up its legal, adjudication, and settlement teams to strengthen enforcement and ensure accountability. “We are writing more orders…and we have the opportunity to write good ones, fix issues, and catch the culprits,” Pandey said.
The regulator is also investing in technology for faster and more efficient investigations and surveillance. However, Pandey flagged cyber security as a growing concern. “Out of the four T’s I mentioned—T, which is technology, is extremely important. Technology makes you powerful. But in a way, it also makes you vulnerable.”
Since taking over two months ago, Pandey has laid out four guiding pillars for SEBI: Trust, Transparency, Teamwork, and Technology. The focus, he said, is on easing the compliance burden without compromising the integrity of the market.
Published on May 8, 2025
