How Tuhin Kanta Pandey steered Sebi out of turbulence

The controversy involving his predecessor, Madhabi Puri Buch, and the allegations raised by Hindenburg Research had unsettled India's market regulator. Foreign portfolio investors were jittery, domestic participation was expanding at a pace never seen before, and questions were raised about both credibility and transparency.

One year later, the tone is calmer.

Describing his year as challenging, Pandey said that Sebi has been working with 4Ts in mind: trust, transparency, teamwork, and technology. “I can say that stakeholders have worked on all 4Ts and Sebi has embarked on its journey towards optimum regulations," said the Sebi chief in a statement.

Over the past year, there have been fewer headline-grabbing moves and a steadier revamp of the rulebook.

“The chairperson’s tenure has been defined by a pragmatic recalibration of the regulatory developmental balance,” said Abhiraj Arora, partner at Saraf and Partners. “By institutionalizing a culture of rigorous industry consultation before finalizing frameworks, the regulator has successfully minimized market friction without compromising on the sanctity of investor protection.”

That recalibration is visible in regulation. Sebi has overhauled the three-decade-old stockbroker regulators to improve the ease of doing business, remove redundancies, and align regulations with the current market structures. Stock exchanges will now act as first-line regulators for stockbrokers, who are required to report non-compliance and submit financial statements directly to them. The market watchdog has also revised the criteria for identifying qualified stockbrokers to ensure that firms with large active client bases come under tighter supervision and compliance oversight.

The market watchdog also revamped mutual fund regulations for the first time since 1996. The framework for total expense ratio (TER)–fee mutual funds charge investors–was overhauled, with additional charges such as statutory levies and goods and services tax (GST) separated from basic expenses incurred by a mutual fund to run multiple schemes. Brokerage limits were capped at 6 basis points (bps), down from 12 bps, for cash markets. For the derivatives segment, these were reduced to 2 bps from 5 bps. Eligibility criteria for sponsors and the roles of asset management companies and trustees were streamlined.

“During the Sebi chairman’s tenure, challenges faced have been addressed meaningfully. He seems to understand that regulations have to be overhauled to current realities. Sebi has acted on a lot of feedback and has also changed regulations practically,” said Deepak Shenoy, chief executive officer (CEO) at Capitalmind Mutual Fund.

“BER (base expense ratio), TER framework saves trouble in commissions. The advantage that was present for non-GST registered distributors has been taken away. The overhaul is welcome and will help the industry more than it will hurt us,” Shenoy added.

The Sebi board has also amended the Listing Obligations and Disclosure Requirements (LODR) to remove ambiguities and streamline processes.

The limits for deciding when a related party transaction is considered important are now based on the size of the company and linked to its annual consolidated turnover. Sebi has also clearly defined when Audit Committee approval is needed for related party deals involving subsidiaries, closing earlier grey areas in regulations.

Merchant bankers also came under the regulator’s radar in the past year. Amendments notified in December allow them to undertake activities not regulated by Sebi, but only through separate, independent business units. Categorization based on capital, underwriting caps, minimum revenue requirements and compliance officer qualifications was formalized.

“Mr. Tuhin Kanta Pandey assumed office at a time when Sebi was facing considerable scrutiny and criticism, both internally within the organization and externally in the capital market," said Akshaya Bhansali, managing partner at Mindspright Legal. "The immediate expectation from the new regime was to restore confidence, reinforce Sebi's credibility, and reposition it as a fair and balanced regulator."

Bhansali added that to a significant extent, Pandey has met these expectations and has brought a sense of balance and responsiveness to the markets.

In August 2024, short-seller Hindenburg Research alleged that Buch and her husband had undisclosed stakes in Bermuda- and Mauritius-based entities that were said to have links with the Adani Group. At the time, Sebi was investigating fraud allegations against the conglomerate. The Adani Group, Buch and her husband rejected the claims.

Pandey’s tenure also saw aggressive selling by foreign investors, who followed bearish sentiment on India's growth, earnings and geopolitical conditions. Foreign portfolio investors (FPIs) sold equity worth $9.5 billion as of January in fiscal 2026.

The current chairman has cracked the whip on entities and individuals who engage in unregistered investment advisory and research analysis.

An interim order against influencer Avadhut Sathe and his trading academy signalled that Sebi is willing to draw a sharper line between opinion and advisory. In its order, the regulator flagged alleged violations in investment advice offered without proper registration.

The action indicates a broader push to clean up the fast-growing ecosystem of market commentary on social media. Sebi recently issued a circular tightening disclosure norms for individuals and entities discussing securities online.

Those providing views on markets are now required to make clear disclosures on registrations on every social media platform and at the beginning of any video about the stock market.

“The regulator is trying to find a way to differentiate between someone's opinion and unsolicited investment advisory. But this requires finding the right balance without infringing on freedom of expression,” said Abhishek Kumar, founder and chief investment advisor at Sahaj Money.

Still, many experts also caution that the latest regulations may have put an additional burden on registered investment advisors (RIAs). RIAs must obtain prior approval from Sebi before posting advertisements. The latest norm requiring disclosure of registration details across all social media platforms adds another layer of compliance for verifying the RIA's identity.

“It can sometimes take months to get permission from Sebi for advertisements. If we are already disclosing our registration details on social media, then the regulator should remove the need for such permissions. The rules are not balanced right now,” said an RIA on the condition of anonymity.

“The industry needs a centralized data repository similar to the one held by the US Securities and Exchange Commission. It would be great for Sebi and Amfi (the Association of Mutual Funds in India) to disseminate data across the industry. They could aggregate data, disclosures and create a repository,” said Shenoy.

“Sebi can further improve the guardrails in the advisory space, and they should also promote it,” said Kumar. “It should not be the case that the regulator takes great initiative to protect investors, but it doesn't trickle down to the investor. Regulations and social media engagement should go hand in hand.”