Tuhin Kanta Pandey: ‘We believe in optimal regulation, not too much, not too little’

Securities and Exchange Board of India Chairman Tuhin Kanta Pandey says that strengthening investor protection, curbing finfluencer-driven excesses, regulating derivatives trading and maintaining a consultative, data-driven regulatory approach are vital for market stability. In an interview to Hitesh Vyas and George Mathew a year after taking charge at SEBI, Pandey speaks about market safety, IPO momentum, retail participation and the road ahead for reforms. ## When you took over as SEBI chair, the domestic market was facing various headwinds, including tariff-related uncertai­nties, sell-off by foreign investors and the rise in unregistered investment advisors. A year later, what is your assessment on reforms carried out and the overall functioning of markets? This entire year has been quite a topsy-turvy year in terms of geopolitical developments and all kinds of uncertainties. Nevertheless, Indian capital markets — the primary market — has remained a very active market. In fact, it is number one in the world in terms of IPOs and number three in terms of value. So far, more than Rs 7 lakh crore has already been raised in debt and equity. We have carried out various kinds of reforms in terms of facilitating the ease of doing business and investments, investor protection and empowerment, strengthening the regulatory framework, fostering market development and also measures taken to strengthen the equity derivatives market. ## So, are markets now safe for investors? Yes, but the question is — how do you define safety? When I joined, I said that I would like to work on four principles — trust, transparency, teamwork and technology. I said we would work towards optimal regulation — not too much of a regulation or too little regulation, but just right regulation, so that we balance interests. Secondly, on our three mandates — investor protection, market development and market regulation — we have assiduously worked with industry and market participants. This is a team work. Also, wherever we have decided principles, the industry has worked to fix operational details. The main thing is to work together as a team to see that our basic essential features of investor protection, market development and market regulation are done optimally, and not excessively or negligibly. We have done a comprehensive review of two major regulations — stockbrokers and mutual funds. To save investors from frauds, we have introduced SEBI Check, a tool through which one can check if a particular account asking to invest money is valid or not, in just 30 seconds. We have also launched the SEBI vs SCAM campaign, where people will get to know the kind of scams that are happening and how they can protect themselves. ## Mushrooming finfluencers were creating a mayhem in the market. Have you successfully contained this problem? That is a very important part of our investor protection efforts. This is also linked to the options trading done by retail investors. Many of these finfluencers (financial market influencers) offered courses, sometimes at considerable cost, took money from young people, and promised them that they could be rich overnight using those methods. We have punctured the misleading claims made by these finfluencers. We have also put out the data showing that 9 out of 10 retail investors who are participating in the options market are losing money. We have taken action against finfluencers. Using artificial intelligence (AI) tools, we are monitoring social media. Our AI tool Sudarshan does a lot of work on filtering and it keeps scanning the internet, Telegram, YouTube and Instagram. Earlier, we used to remove 5,000 (unregistered finfluencers) sites every month, but from October 2025, we have been taking down 7,000 every month. So far, we have removed 1,20,000 such sites. ## SEBI and government measures to curb speculative trading in futures & options (F&O) have helped reduce the average daily turnover in the segment. Are further measures required to discourage retail participation? Is there a plan to ban retail investors from the derivatives market? The problem has not been in the futures segment. The issue area is the weekly index options, where we have seen hyperactivity which has led to all the losses, especially on the expiry day. We have taken a number of measures, first in October 2024 and then in May 2025. These included how to regulate this market better in terms of position limits, change of open interest to delta positions and introduction of extra margins. We tried to curb the extra hyperactivity, and also tried to improve the behavior of the big players. So, we would like to really go into further data to assess the impact of those measures. For anything we want to do, we follow a process — we put out data, release consultation papers and see different ways that have been suggested. Many people want that the market should not be killed for everyone. You just cannot simply ban everything. We also have to see the effectiveness and the practicality of the measures that we take. You have to be patient and wait for this analysis to come in. Too many policy flip-flops are not really good. ## Is SEBI looking at making NISM certification mandatory for retail investors to trade in the F&O segment? Many people have suggested that measure. Right now, I am not in a position to tell you what we are contemplating or what we are going to do, because we have not exactly delved into that as yet. We will first analyse the data to see whether there is a need to do something or not. The second thing is how we implement it. After we frame ideas internally, we put them out as a consultation paper, inviting people’s comments on it. This is our normal process. Over the last one year, we have not surprised the market. We feel that our system should be more consultative, data based and analytical. We should give a chance to different aspects of perspectives, analyse them, and then make decisions. Institutional investors are saying that tighter F&O regulations have dented trading volumes. Uncert­ain­ties around the contin­uation of regulations are posing a challenge. Your thoughts. So, we are not really changing the regulation.