Sebi bats for ‘optimal regulation,’ likely to revamp norms
Apr 12, 2025
Synopsis
SEBI Chairman Tuhin Kanta Pandey announced a potential regulatory overhaul to ease compliance burdens and modernize norms. SEBI is collaborating with the RBI and government to simplify investment rules for overseas funds and individuals in the Indian stock market, including exploring fungibility between FPI and FDI.
The Securities and Exchange Board of India (Sebi) is considering a broad regulatory overhaul to make compliance less onerous and norms more relevant, chairman Tuhin Kanta Pandey said in an interview,
The newly appointed regulatory chief said the market watchdog is in discussions with the Reserve Bank of India (RBI) and the government to ease investment rules for overseas funds and foreign individuals in India's stock market. He defended the recent regulatory measures to temper heightened activity in the equity futures and options segment.
Pandey emphasised the need for "optimal regulation" and doing away with "micromanagement." Toward this end, one of Sebi's priorities will be a review of existing regulations.
The Sebi chief said the regulator is working with RBI and the Department of Economic Affairs (DEA) to consider allowing fungibility between foreign portfolio investment (FPI) and foreign direct investment (FDI) as part of attempts to simplify rules for overseas investors in India.
FPI refers to purchase of listed stocks and other securities, while FDI is long-term, direct investment in a company.
"This requires a change in foreign exchange management rules," he said. "We are positively inclined because the context has changed, and I think the rules need to be updated." The proposal to allow foreign individuals to invest directly in Indian stocks is still under discussion, he said.
Pandey indicated that Sebi is in no hurry to revisit an earlier plan to reduce the Total Expense Ratio-the fee unit-holders pay mutual funds to manage their money.
The Sebi chairman said the long-pending initial public offering of the National Stock Exchange could be cleared, "subject to satisfactory resolution" of some issues.
[The Economic Times]
