India’s capital markets regulator is witnessing a change of leadership just as a deepening foreign exodus is casting a pall on the outlook for local stocks. The number one demand from investors: less regulation.
New Delhi late on Thursday appointed Tuhin Kanta Pandey, the top bureaucrat in its Finance Ministry, to head the Securities and Exchange Board of India. He replaces Madhabi Puri Buch, whose time in charge of the regulator has been marked by controversy, and also what some market watchers deem as excessive regulation.
Her three-year tenure has seen a sharp jump in regulatory proposals, with as many as 197 discussion papers released. That’s a 73% rise from her predecessor’s five-year term, SEBI data compiled by Bloomberg showed.
“SEBI must balance innovation with stable, long-term policies,” said Sonam Srivastava, founder of Wright Research in Mumbai. Frequent regulatory changes create uncertainty, she added.
A career bureaucrat, Pandey is currently India’s Finance Secretary. He oversees the revenue department that is responsible for collection of taxes. Buch, an investment banker-turned-regulator who became SEBI’s first woman chairperson in 2022, will end her three-year term on Friday.
Under Buch, SEBI took steps to improve market access and mitigate risks — like simplifying registration for global funds and slashing the timeline for debut of new shares. But flip-flops on investment rules for alternative funds as well as disclosures by foreign investors, and stringent curbs on derivatives trading were among steps that investors say made it tougher to do business.
“The new SEBI head needs to abide by the mantra of keeping it simple,” said Deven Choksey, managing director at DRChoksey FinServ Pvt, a wealth manager. “Investors will appreciate if the new chairperson can first simplify the regulations for derivatives and know-your-client norms to ease investor participation in the market.”
SEBI didn’t respond to emailed requests for comments from Buch for this story.
Governance Standards
Foreign investors have been forced to think harder about corporate governance standards in India over the past few years. A short seller report in early 2023 accusing the Adani Group of wrongdoing — allegations the group denied — led to a lengthy probe by the regulator that kept markets on edge. Questions about board independence and the front-running of equity orders have also rattled nerves.
The new SEBI chief can look to other Asian markets such as Japan and Korea for inspiration when it comes to corporate governance reforms. India needs urgent upgrades to disclosure standards from its smaller companies that have increasingly attracted interest from foreign funds but remain on the periphery owing to frequent malpractices by founders.
“They really need to have strengthened corporate governance with speedier investigation and enforcement,” said Gary Dugan, chief executive officer at The Global CIO Office in Singapore. “Foreign investor confidence continues to be undermined by inconsistency and the slow pace of reform.”
Buch has come under criticism during her time at SEBI. US short seller Hindenburg Research LLC, which published the Adani report, alleged she had conflicts of interest due to business links with the Adani family. Buch and the Adanis have denied the allegations. She and her husband also came under fire from opposition politicians.
To her credit, Buch oversaw the rapid adoption of technology at the regulator to help identify instances of stock manipulation, and also helped make India one of the fastest destinations globally for the settlement of equity cash trades. She also acted to safeguard the interests of small investors by reigning in financial influencers, increasing scrutiny of public issues and conducting stress tests on the country’s small- and mid-cap funds.
Indian stocks have suffered in recent months as concerns over a slowdown in economic as well as earnings growth have seen foreign funds exit the market. The benchmark NSE Nifty 50 Index is down almost 5% in 2025 after nine straight years of gains.
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