What Sebi chief Tuhin Kanta Pandey said on conflict-of-interest guidelines, F&O trading, and common KYC
New Delhi, April 7, 2025
In an interview with Financial Express, Sebi chairman Tuhin Kanta Pandey discusses the new conflict-of-interest framework, direct foreign investment in the Indian equity market, and new investors in the F&O market.
Tuhin Kanta Pandey took over as the Chairman of the Securities and Exchange Board of India (Sebi) on March 1. He assumed office at at a time when the market is facing multiple challenges, including an ongoing stock sell-off, the withdrawal of over Rs 2 lakh crore by foreign institutional investors’ since October last year, and a review of the delisting norms.
In an interview with Financial Express, Pandey talked about optimising Sebi regulations, the new conflict-of-interest framework, and his thoughts on allowing foreign individuals to invest directly. Here are the key points from his interview.
1) On Sebi regulations
Sebi chairman Tuhin Kanta Pandey said that the financial regulator is looking forward to review its decades-old regulations. He said that Sebi aims to accelerate this process within the next three months after consulting all stakeholders. “We have got three mandates –investor protection, development of market and regulation. We have to look at all three equally. Regulation can’t be an end in itself; they should be a means to an end,” he said, adding that what is required is “optimum regulation because over-regulation will kill innovation”.
2) On conflict-of-interest guidelines
Pandey said that the conflict-of-interest guidelines will be good for Sebi. “The conflict-of-interest issues has two parts — the level of disclosures related to your investments, property, or other things. The second level of conflict of interest are matters whether you are dealing with any of the companies in the listed space. So, we should have proper guidance as to where we are going to recuse and in what manner,” he said.
3) On whether foreign individuals will be allowed to invest directly in the Indian equity market
The Sebi chairman said that at present foreign individuals can register and come as foreign portfolio investors (FPI) or through a pooled vehicle FPI. “Yes, there are certain ideas on whether they can come as an individual also. They are being examined,” he said.
4) On influx of new investors in future and options (F&O) market
According to Pandey, though the ticket size is smaller, a number of people, especially from younger generation, are trying their luck in the F&O market. They need to be made aware of the stickiness of the market and risk metrics. Sebi had already published a report on derivative trading that said 90% of these investors were losing money.
5) On common KYC
Pandey underlined the importance of a common KYC, which he said is “highly desirable”. He added that Sebi is working with the RBI to achieve it.
[The Financial Express]
