The Securities and Exchange Board of India (Sebi) is strengthening its regulatory impact analysis to assess the outcome of its policies based on evidence. The Regulatory Impact Committee has been formed and is chaired by Chief Economic Advisor V. Anantha Nageswaran and there are such assessments done in other jurisdictions too, Chairman Tuhin Kanta Pandey said on Thursday, adding that the first such study is expected to be taken up soon.
Pandey also vouched for lower cost of capital for productive sectors, noting that access to finance should be adequate and affordable. “There is always a cost of regulation…we need to simplify the regulation while maintaining its objective,” Pandey said on the sidelines of the sixth annual international research conference of Sebi and the National Institute of Securities Markets.
Derivatives Deadlock
Further, when asked whether the regulator got any comments or requests from the broking industry with respect to the government’s latest proposal to hike securities transaction tax (STT) on equity derivatives, Pandey said he does not want to comment on the matter and that he is “not aware of it”. The chairperson also reiterated that the regulator maintains a status quo on the derivatives segment for now, indicating no new measures will be adopted.
On February 1, Finance Minister Nirmala Sitharaman had proposed to hike STT on futures to 0.05% from 0.02%. Also, STTs on options premium as well as exercise of options were proposed to be hiked to 0.15% each from 0.1% and 0.125%, respectively. This had disappointed derivatives traders who were in fact looking forward to some relaxation in this tax which was hiked during the Union Budget in 2025 too.
For questions about whether there are any proposals to bring options trade in the commodities market, he replied that “we are currently at whatever is the status quo”.
Pandey also declined to respond to the question about Revenue Secretary Arvind Shrivastava’s comments that the STT rate will remain “modest”. “I would not like to comment on what the revenue secretary said and in what context.”
NSDL glitch
Pandey said that a root cause analysis has to be done, as per its standard protocol, to identify what went wrong with the recent glitch at the National Securities Depository Limited (NSDL). The analysis will then be shared with the Technical Advisory Committee. “We have to see what issues can be there, what are the problem areas, and how to address it.”
Last week, technical glitches at the NSDL for three days had delayed the settlement of some equity trades and affected crediting shares to investors’ accounts. The chairman said that these settlements were done on Saturday and the depository was functional from Monday.
Certain glitches may happen sometimes in legacy softwares because of the growing nature of the market, Pandey said, adding that institutions have to suitably upgrade their systems and identify such glitches.