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SEBI to take measures to cut regulation cost: Pandey

February 13, 2026 4 min read Economics GS3 (Indian Economy — Capital Markets)
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What Happened

  • SEBI Chairman Tuhin Kanta Pandey announced that the capital markets regulator is pursuing multiple measures to reduce regulatory costs and compliance burdens.
  • A special committee under the Chief Economic Advisor (CEA) V. Anantha Nageswaran has been constituted to assess the impact of regulatory interventions on market participants.
  • The Centre for Regulatory Studies is being established as a centre of excellence at the National Institute of Securities Markets (NISM), and a dedicated unit under SEBI's Department of Economic and Policy Analysis (DEPA) will study regulation impact.
  • These initiatives were discussed at the Financial Stability and Development Council (FSDC) level as part of broader inter-regulatory coordination to reduce the cost of finance.

Static Topic Bridges

SEBI -- Structure, Powers, and Regulatory Mandate

The Securities and Exchange Board of India (SEBI) was established by the SEBI Act, 1992, to protect investor interests, regulate the securities market, and promote market development. SEBI is a statutory body with quasi-legislative (framing regulations), quasi-executive (enforcement and investigation), and quasi-judicial (adjudication and penalties) powers. It regulates stock exchanges, depositories, mutual funds, FPIs, credit rating agencies, and market intermediaries.

  • Established: April 12, 1992 (statutory body under SEBI Act, 1992); initially set up as a non-statutory body in 1988
  • Headquarters: Mumbai
  • Composition: Chairman + 2 members from the Central Government + 1 from RBI + 5 other members
  • Key functions: Regulation of issuers (listing obligations), intermediaries (brokers, merchant bankers), and investors (grievance redressal via SCORES portal)
  • The Securities Markets Code Bill, 2025, seeks to consolidate and modernise securities regulation, replacing the SEBI Act, Securities Contracts (Regulation) Act, and Depositories Act
  • The Code decriminalises minor and procedural violations, converting them into civil defaults

Connection to this news: The new chairman's focus on cost reduction signals a shift in SEBI's regulatory philosophy from compliance-heavy oversight to a more efficiency-oriented approach, while the Securities Markets Code 2025 provides the legislative framework for this transformation.

Financial Stability and Development Council (FSDC)

The FSDC is India's apex inter-regulatory coordination body for the financial sector. Chaired by the Union Finance Minister, it was set up in December 2010 (non-statutory) to address macro-prudential supervision, financial stability, and inter-regulatory coordination among financial sector regulators. It serves as a platform for resolving inter-regulatory disputes and coordinating responses to systemic risks.

  • Established: December 2010 (non-statutory body)
  • Chair: Union Finance Minister
  • Members: Heads of RBI, SEBI, IRDAI, PFRDA, IBBI, FMC (now merged with SEBI), Finance Secretary, DEA Secretary, DIPAM Secretary, CEA
  • FSDC Sub-Committee (chaired by RBI Governor) handles operational coordination and financial stability reviews
  • Functions: inter-regulatory coordination, financial literacy and inclusion, macro-prudential supervision
  • Does not have statutory backing (unlike UK's Financial Policy Committee or US Financial Stability Oversight Council)

Connection to this news: The regulatory cost reduction discussion taking place at the FSDC level indicates it is a cross-regulator initiative, not limited to SEBI alone, suggesting coordinated action across RBI, IRDAI, and PFRDA to reduce the overall cost of financial intermediation.

Regulatory Impact Assessment (RIA)

Regulatory Impact Assessment is a systematic process of evaluating the potential effects of proposed regulations before they are implemented. It involves cost-benefit analysis, stakeholder consultation, and assessment of alternatives. OECD best practices recommend RIA for all significant regulatory proposals. In India, NITI Aayog has recommended adoption of RIA across regulators, and the practice is gradually being institutionalised.

  • RIA typically includes: problem definition, objective, policy options, cost-benefit analysis, consultation summary, and monitoring plan
  • SEBI's new approach involves an external expert committee and a dedicated DEPA unit for impact assessment
  • The Centre for Regulatory Studies at NISM will conduct research on regulatory impact
  • OECD's Recommendation of the Council on Regulatory Policy and Governance (2012) recommends systematic RIA
  • India's Financial Sector Legislative Reforms Commission (FSLRC, 2013) under Justice Srikrishna recommended mandatory cost-benefit analysis for all financial regulations

Connection to this news: The constitution of an expert committee under the CEA and the establishment of dedicated research units represent SEBI's first institutional move toward systematic regulatory impact assessment, aligning with global best practices recommended by the OECD and the FSLRC.

Key Facts & Data

  • SEBI Act enacted: 1992; SEBI set up (non-statutory): 1988
  • FSDC established: December 2010 (non-statutory, chaired by Finance Minister)
  • Securities Markets Code Bill introduced: 2025 (consolidates three existing Acts)
  • NISM established: 2006 (educational initiative by SEBI for securities markets)
  • SEBI's SCORES portal handles investor grievances (over 50,000 complaints resolved annually)
  • SEBI regulates: 7,000+ listed companies, 2,000+ registered intermediaries, 40+ mutual fund houses
  • FSLRC (2013) recommended mandatory cost-benefit analysis for financial regulators