After a lot of cacophony over the last couple of years, the corner office at SEBI Bhavan is giving out sound bites that should soothe the nerves of regulated entities. The new chairman of the Securities and Exchange Board of India (SEBI), Tuhin Kanta Pandey, has been making all the right noises, which is the way it should be, as market intermediaries look up to the regulator for guidance. In an interview to this paper — his first after taking over the new position — Pandey said he will set up an internal panel to review all regulations and weed out those that have lost relevance. His earnestness is evident from the fact that a time frame of three months has been given to accelerate the process. His stated preference for optimum regulation instead of maximum regulation should create a lot of positive vibes. The good thing is Pandey has avoided the familiar route of appointing external committees to draw up a mission statement.
The entire process will be done internally so that there is skin in the game. Of course, outside experts will be consulted, but the responsibility lies squarely on SEBI’s own officers. Pandey should know the efficacy of such a move as it would be similar to the one carried out by the Income Tax department while drafting the Direct Tax Code, 2025. And he was finance and revenue secretary when the Code was presented to Parliament on February 13, just two weeks before he was appointed SEBI chairperson.
Discontinuing regulations that are past their sell-by date is something that must be done urgently. Pandey also showed enough flexibility in his approach when he said that sometimes, regulations can be brought in for a short term only to fix newer challenges that emerge in a very dynamic market and then withdrawn after the issues have been resolved. This is quite a sensible and refreshing thing to do. So there is considerable merit in former SEBI chief M Damodaran’s recent assertion that the regulator’s tendency, especially in the last few years, to be the first to undertake a new initiative sometimes turned out to be disruptive, and with negative consequences. But Pandey’s commitment that a sledgehammer approach would be a thing of the past should be a relief for those at the receiving end of a plethora of regulations, giving rise to compliance challenges and costs, Damodaran wrote.
Pandey clearly wants to have a proactive, data-driven engagement. This shift toward real-time intelligence and digital surveillance is in line with global best practices and also highlights SEBI’s readiness to evolve beyond traditional regulatory paradigms and embrace new-age tools to respond swiftly to market irregularities. The regulator is also looking to deepen coordination with other statutory bodies and law enforcement agencies to share data and enhance enforcement capabilities. This collaborative approach can eliminate regulatory blind spots and ensure that market participants operate within a consistent and transparent legal framework.
SEBI obviously has to address the complexity of its regulations to ensure clarity and effectiveness in protecting investor interests and foster a robust market. Complex regulations can make it difficult for investors to understand their rights and obligations, and often hinder market efficiency by creating unnecessary barriers for participants and increasing compliance costs. Going by his no-nonsense approach to complex issues during his distinguished tenure as a senior bureaucrat, Pandey would surely walk the talk.