SEBI Chairperson Emphasizes Optimal Regulation for a Thriving Market

SEBI's Role in Market Regulation

The Securities and Exchange Board of India (SEBI) Chairperson, Tuhin Kanta Pandey, spoke about the importance of optimal regulation in the market at the Mint Annual BFSI Conclave 2025. He emphasized that regulation is not the end goal, but rather a means to achieve a well-functioning market.

Key Points on Market Regulation

• Optimum regulation: SEBI's goal is to achieve optimal regulation, which means finding a balance between over-regulation and under-regulation. Over-regulation can stifle innovation, while under-regulation can lead to systemic risk.
• Regulation is not an end in itself: Pandey stated that regulation is for a purpose and that purpose changes with the context. He also highlighted the concept of "stickiness" in rules and regulations, where regulations tend to remain in place even when they are no longer necessary.
• Endemic stickiness: Pandey noted that this phenomenon is not unique to India, but is also present in other jurisdictions. Many countries are now focusing on deregulation and streamlining their regulatory frameworks.
• Improving regulations: Pandey emphasized that there is always room for improvement in regulations. He suggested that penalties should not be excessive and that regulations should be regularly reviewed to ensure they remain effective.
• Streamlining regulations: SEBI is working to create a more streamlined regulatory framework by introducing a common regulation for fund managers. This will reduce the cost and time of doing business, while also minimizing risks.

SEBI's Future Plans

Pandey outlined SEBI's plans to review and refine its regulations to ensure they remain relevant and effective. This includes introducing sunset clauses to ensure that regulations do not remain in place indefinitely. By streamlining its regulatory framework, SEBI aims to promote a thriving market and support the growth of the Indian economy.

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