Balanced approach needed in regulation: Sebi chairman

Sometimes, we make regulations tougher than necessary, said Sebi chief Tuhin Kanta Pandey

- Srushti Vaidya

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 on Friday. Tuhin Kanta Pandey, chairman of the Securities and Exchange Board of India (Sebi), said that high entry barriers could be resulting in a low number of registered investment advisors (RIAs) in India, adding that the RIA business should evolve to a paid one. Edited excerpts.

We have seen a lot of action on the futures and options front with the introduction of several complex regulations. Do you think having a threshold for retail investors to invest in F&O would have been easier to implement?

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 errors. A balanced approach will do a lot of market development, while flip-flopping causes unnecessary volatility.