SEBI Chief Calls for 'Optimum Regulation' to Deepen India's Financial Markets

Addressing the theme "Strengthening India's Financial Markets - Debt, Efficiency and Stability", Pandey noted that the current geopolitical tensions in West Asia highlight how shocks in one region can impact energy prices, inflation expectations, capital flows and investor sentiment worldwide. For India, this reinforces the need for markets that can mobilise both domestic and global capital, absorb information quickly, and withstand external volatility.

Pandey outlined SEBI's approach as "optimum regulation" -- proportionate, risk-based and focused on enabling growth with guardrails. "Too little regulation can damage trust. Too much can slow growth," he said, adding that a forward-looking regulator must constantly ask whether capital raising is being made easier, if disclosures are fit for purpose, and whether market development is keeping pace with investor protection.

The Chairperson emphasised that India requires long-term capital and market-based finance, while investors need broader choices. This means market development and investor protection must move together. Recent measures include streamlining processes for time-bound launch of Alternative Investment Funds, a step he said is especially relevant for debt markets where the next phase must focus on issuer diversity, liquidity and wider participation.

Pandey stressed that market integrity is non-negotiable. "A market can be large, liquid and technologically advanced, but without trust, it cannot be strong," he said. Integrity, he noted, rests on fair pricing, reliable disclosures, accountable intermediaries, resilient infrastructure and credible enforcement. Listed companies, he added, must treat disclosure as a duty rather than a formality, while boards should ask tough yet constructive questions.

To strengthen governance, SEBI will launch a multi-year capacity-building initiative for independent directors in partnership with industry, academia and professional bodies.

He also underlined the role of intermediaries and market infrastructure institutions as gatekeepers of trust, saying that as markets grow, the governance, technology and resilience of exchanges, clearing corporations and depositories must remain robust.

On innovation, Pandey said India needs solutions that reduce friction, widen access, lower costs and support capital formation. He cited digital onboarding, faster settlement, direct payout, online bond platforms, REITs, INVITs, AIFs, municipal bonds, green bonds and commodity derivatives as examples of products and processes that can deepen markets and improve risk management.

He said market integrity cannot be repaired after trust is broken; it must be built beforehand. The goal, he said, is to ensure that growth and liquidity translate into lasting investor confidence.

- ANI