SEBI’s Shift Under Tuhin Kanta Pandey

Under the leadership of Tuhin Kanta Pandey, the Securities and Exchange Board of India (SEBI) is adopting a more deregulated, governance-focused approach, moving away from rapid regulatory tightening.

• Emphasis on evaluating the “costs” of regulatory changes
• Focus on nuanced, clear, and business-friendly regulations without compromising risk management

Key Changes Announced at SEBI’s Latest Board Meeting

• Deferred oversight on the appointment of Key Managerial Personnel (KMPs) in Market Infrastructure Institutions (MIIs)
• Postponed stricter norms for investment bankers and custodians due to concerns over complexity and cost
• Relaxed advance fee collection rules for research analysts and investment advisers from the earlier 3-6 month limit to one year
• Eased norms for Category II Alternative Investment Funds (AIFs) by broadening their investible scope in the debt segment
• Scrapped the rule mandating merchant bankers to transfer non-listed business to subsidiaries
• Removed the requirement for SEBI approvals for KMP appointments at MIIs

Earlier Steps Ahead of Board Meeting

• SEBI had already eased “skin in the game” rules for mutual fund employees, adopting a flexible approach to attract talent

SEBI’s New Playbook: Key Themes

• Mindful consideration of regulatory costs
• Alternative risk-mitigation strategies
• Preference for effective and optimal regulations over overly rigid frameworks
• Deferment of complex proposals to allow refinement and industry engagement
• Relaxation of previously imposed stringent advance fee norms
• Governance over micromanagement — reducing regulatory burden where unnecessary