In a clear signal that India’s market regulator is shifting towards evidence-based rulemaking and cost-efficient oversight, Securities and Exchange Board of India (SEBI) chairman Tuhin Kanta Pandey announced the formation of a high-level committee to guide the rollout of a formal regulatory impact assessment (RIA) framework.
“The committee will convene, with the chief economic advisor (CEA) as its chair. That committee will provide guidance on conducting regulatory impact assessments,” Mr Pandey told reporters on the sidelines of the Sixth Annual International Research Conference on Securities Market, jointly organised by SEBI and the National Institute of Securities Markets (NISM) in collaboration with IIM Mumbai, Maharashtra National Law University and National Stock Exchange (NSE).
The move is part of SEBI’s broader effort to reduce compliance burdens and regulatory costs, thereby improving the competitiveness of India’s securities markets and enhancing access to finance across sectors.
Mr Pandey underlined that regulatory efficiency is not a peripheral issue but central to economic competitiveness. “Efficiency, cost efficiency of all our measures is important because if you have to build competitiveness, then obviously if there is a compliance burden on regulation, it's too high in terms of cost and time, then obviously to that extent the competitiveness also goes down,” he says.
While he acknowledged that it is difficult to quantify precisely the extent of gross domestic product (GDP) expansion that could result from such reforms, the SEBI chief stressed that reducing the cost of capital remains a primary objective.
“There is always a cost of regulation,” Mr Pandey noted, adding that the focus must be on simplifying regulations without diluting their core objectives.
SEBI has already initiated groundwork for the RIA framework. An internal enablement exercise has been completed and a dedicated unit, the department of economic and policy analysis (DEPA), has been set up within the regulator to support this effort.
In parallel, SEBI is establishing a centre for regulatory studies that will function as a centre of excellence. A search committee has begun identifying experts to be associated with the new centre.
“That will be a high-level centre which will be a continuing centre, and that will also help with this research,” Mr Pandey says.
He added that the Union minister of finance has repeatedly emphasised in Budget speeches the need for structured regulatory impact assessments and SEBI is now on course to operationalise that direction.
“There are regulatory impact assessments in other jurisdictions, and we will study them as they are done elsewhere. But we need to develop our own models and research in India,” he says. Once such frameworks are developed domestically, policy schools and research institutes can collaborate more effectively on studying how regulations affect markets and economic outcomes.
In his address at the conference, the SEBI chairman placed these reforms in the broader context of India’s evolving securities markets, describing a structural shift from scale to sophistication.
Over the past decade, India’s market capitalisation has grown from around Rs100tn (trillion) in FY14-15 to over Rs470tn today. The corporate bond market has expanded steadily at a compounded annual growth rate (CAGR) of around 12% since FY14-15, reaching around Rs58tn by end-2025.
Investor participation has widened dramatically. Unique investors have risen from 38mn (million) in March 2019 to about 140mn today. Mutual fund assets under management have surged from about Rs12tn in FY15-16 to Rs81tn as of January 2026. Alternative investment funds (AIFs) have grown from around Rs0.2tn in FY15-16 to over Rs6.5tn by December 2025.
“These numbers show a structural shift,” Mr Pandey says, noting that securities markets now play a central role in financing enterprises, supporting micro, small and medium enterprises (MSMEs) and startups and channelising household savings into productive investment.
At a time when global finance is increasingly fragmented and risk-sensitive, he says, India’s market journey is being closely watched and that brings added responsibility to build markets that are deep, trusted and resilient.
A significant part of SEBI’s strategy revolves around data-driven supervision and research-led policymaking.
Mr Pandey says technology now forms the core architecture of modern securities markets, from trading and clearing to surveillance. Artificial intelligence (AI) and advanced analytics are increasingly being deployed for detecting misconduct, understanding investor behaviour and strengthening supervision.
But he also cautioned that innovation carries risks: algorithmic trading can create feedback loops, AI models can introduce opacity, and technology can amplify errors at speed.
“Innovation must be accompanied by understanding. Otherwise, speed can outpace safety,” he observed.
To deepen research, SEBI has taken steps to make public data more accessible in downloadable formats. Stock exchanges, clearing corporations and depositories have been mandated to frame data-sharing policies to facilitate research and analysis.
SEBI’s recent investor survey 2025 has also been placed in the public domain in a freely usable format, with the chairman inviting researchers to extract deeper insights from the dataset.
“We increasingly view market data as a public good,” he says, emphasising that responsible sharing of data can support better policy design and risk assessment.
Mr Pandey pointed out that the questions of regulatory efficiency and the cost of finance are not limited to SEBI alone. These issues are discussed at the Financial Stability and Development Council (FSDC) level, which brings together multiple regulators.
“Basically, I think it is a part of the whole exercise which, through FSDC, the inter-regulatory bodies' coordination is set up and they are looking at various ways to collect data, push research, and then throw up ideas on how we can improve the access and reduce the cost of finance in general,” he explained.
On the recent technical glitch at National Securities Depository Ltd (NSDL), the SEBI chief confirmed that the system is functioning normally.
A technical issue in the inter-depository transfer system had led to settlement backlogs, which were cleared by the weekend. SEBI is now awaiting a root cause analysis that will be placed before its technical advisory committee (TAC).
“In the legacy software, sometimes some glitches may come because of the growing nature of the market and then they have to suitably upgrade and suitably identify the glitches,” he says, indicating that system upgrades would follow.
"Innovation must be guided by research and evidence, inclusion must be shaped by behavioural insight, and resilience must rest on sound governance," the SEBI chairman concluded.
