Context:
SEBI’s new chairman, Tuhin Kanta Pandey, emphasizes incremental reforms over disruptive big-bang changes. SEBI aims for optimum regulation rather than excessive rule-making, reducing compliance burdens and fostering a business-friendly regulatory environment.
Reviewing & Eliminating Outdated Regulations
- SEBI acknowledges that some regulations are outdated and may no longer serve a purpose. It is open to reviewing and discontinuing redundant rules. There are calls for a Regulations Review Authority similar to RBI’s model to assess the impact and necessity of existing regulations.
Market Integrity & Strengthening Institutions
- SEBI seeks to empower market infrastructure institutions (MIIs) while ensuring accountability. MIIs will be subject to independent external evaluations and checks to prevent misuse of power.
Transparent & Structured Consultation Process
- SEBI has institutionalized a regulation that mandates a transparent consultative process. A 21-day consultation period has been introduced for regulatory proposals, an improvement from the previous two-week timeline. However, concerns remain about overlapping consultation papers, which could overwhelm stakeholders.
Encouraging Voluntary Compliance & Fair Enforcement
- SEBI will focus on nudging market participants toward voluntary compliance rather than relying solely on punitive measures. It has committed to uniform enforcement actions, eliminating arbitrary decisions. Technical & procedural violations will be handled with opportunities for corrective action, ensuring a balanced approach between supervision and market freedom.
A Positive Start for SEBI’s New Era
Market participants welcome this pragmatic, consultative, and business-friendly approach. The focus is on maintaining market integrity while removing unnecessary regulatory burdens. The early signs of Chairman Pandey’s leadership indicate a shift toward efficiency, transparency, and fairness, marking a constructive beginning for SEBI’s regulatory framework and fostering continued stability and growth in India’s capital markets.
