Sometimes, we react very strongly and make regulations tougher than necessary: Sebi chairman Tuhin Kanta Pandey
Subscribe to enjoy similar stories. Regulations need to have a balanced approach, the chief of India’s market regulator said during a keynote session at the Mint India Investment Summit 2025 held recently. Tuhin Kanta Pandey, chairman of the Securities and Exchange Board of India (Sebi), also said that high entry barriers could be the cause of the low number of registered investment advisors (RIAs) in India, adding that the RIA business should evolve to a paid one.
Edited excerpts. Any issue has two sides. Type 1 error occurs when a lack of regulation creates systemic risk, harming people and other sectors.
Type 2 error occurs when over-regulation stifles innovation. Regulators must balance these two sides. If we are concentrated and unaccountable, the chances of errors increase.
Proactive, data-driven engagement helps avoid both types of errors. A balanced approach will do a lot of market development, while flip-flopping causes unnecessary volatility. F&O is a complex market and when you are walking up the complexity chain, we cannot have a sledgehammer approach or a very blunt approach.
We need a surgeon’s knife. We need to know exactly how to regulate or else the innovations will be lost. Reports showed over 90% of small investors in F&O were losing (money), highlighting both awareness and systemic issues.
We are working with stakeholders and experts and have received 800 comments on the F&O discussion paper. Increasing thresholds alone is not the solution. F&O is key for hedging risks and price discovery.
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