The new conflict of interest framework should be clear on the do's and don'ts as there are many grey areas

Tuhin Kanta Pandey, chairman of the Securities and Exchange Board of India (Sebi), is seeking to simplify the regulatory regime.

- Tuhin Kanta Pandey, chairman of the Securities and Exchange Board of India (Sebi)

In his first interview after taking over as chairperson, he talks to Prasanta Sahu and Joydeep Ghosh about Sebi's thought process on allowing foreign individuals to invest directly in the Indian equity market, the new conflict-of-interest framework, and more. Excerpts:

Many Sebi regulations are decades-old. Are you looking at a regulatory review process?

I would like to give Sebi this goal, through an internal committee, to work on this. It would be quite similar to how the Direct Tax Code was drafted. It was an entirely internal effort in consultation with outside experts and the outcome has been pretty good. At Sebi, we want to accelerate this process, but instead of trying to fix these problems very quickly, we will do it after talking to all the stakeholders.

Do you have a time frame in mind?

I think within the next three months, we will be able to start accelerating this process, in terms of identifying the pain points. It will be driven as an organisational mission.

What is the broad theme of the new regulations?

We need an optimum regulation because over-regulation will kill innovation. We understand that if you have to do a complex surgery, there has to be precision engineering. It should not damage other organs. The art of modern regulation is to ease the compliance burden while making regulation more effective.

There are other issues, too. Suppose there is an egregious case. How do we fix that case? Was it a problem of implementation? Or was there a systemic flaw? If it's the latter, we should fix that. But if we are in a hurry to give our own solutions to a problem, sometimes it may not be the right diagnosis. 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.

Do you think there is a need for assessment of regulatory impact?