New Sebi chief's first board meeting: What the markets are watching

Changes in disclosure norms and regulatory amendments for qualified institutional buyers, and fee collection by research analysts are likely to be the key agenda for Tuhin Kanta Pandey

By Nasrin Sultana

Published: Mar 21, 2025 05:35:04 PM IST

Updated: Mar 24, 2025 10:34:45 AM IST

Securities and Exchange Board of India (SEBI) headquarters in Mumbai. Image: Reuters /Francis Mascarenhas

All eyes are on the board meeting of the Securities and Exchange Board of India (Sebi) on March 24, the last one of the fiscal and first of the new chairman Tuhin Kanta Pandey. No big bang reforms or decisions are expected in the meeting, as typically is the case when a new head takes over.

Pandey, who took over as the chairman from Madhabi Puri Buch for a three-year stint, had said in his maiden public speech at a media event, “All reforms need not be big-bang. Many a times small reforms cumulatively are more effective. Going forward, Sebi will use a right mix of both to achieve the objectives.”

The key agenda likely to be discussed in the upcoming board meeting are a mix of changes in disclosure norms and regulatory amendments related to qualified institutional buyers (QIBs), and the fee collection by research analysts. The market regulator is expected to raise the investment threshold for granular ownership disclosures by foreign portfolio investors (FPIs) to Rs50,000 crore from Rs25,000 crore, according to a Business Standard report.

Second, under the new chief, Sebi is also likely to take a decision on the advance fee collection rules by research analysts and investment advisors.

The board meeting is also expected to expand the definition of QIBs. The Sebi consultation paper, on February 21, had proposed to include accredited investors (AI) for the purpose of investments in angel funds.

Also read: Madhabi Puri Buch: A tightrope walk of regulation, reform and innovation

The key proposal in the consultation paper was to mandate that angel funds will onboard and offer investment opportunities only to accredited investors to ensure that only investors with commensurate risk appetite invest in them. Other flexibilities proposed were based on the strength and regulatory comfort of allowing only AIs to invest in angel funds.

Currently, the Companies Act, 2013 limits offer and allotment of securities under private placement to 200 investors but exempts QIBS as defined in Sebi (ICDR) Regulations, 2015, from the cap. If, for angel funds alone, the definition of QIBs is expanded to include AIs due to their better understanding of investment risks, angel funds can offer the investment opportunities to a higher number of discerning investors, thus increasing the funding avenues for startups through this route. This would also allow the scaling up of angel funds by attracting more investors, who are independently verified, as having the necessary risk awareness and appetite, while staying in conformity with the regulatory intent and objective, Sebi had said in the consultation paper.

Meanwhile, market participants are already seeing a change in the tone of the market regulator under the new chief, though it may be too early to draw any conclusion.

In his earlier public speech, soon after taking over the baton, Pandey had stressed on compliance, governance and transparency. He had said that, going ahead, Sebi will endeavour to bring more transparency in the system, including board disclosures. It will be a significant move if Sebi tightens board disclosure norms further as the market regulator came under several scrutiny under previous chairperson Buch in matters of ‘conflict of interest’ related to the Hindenburg allegations of Adani group stocks.

“Trust and transparency are crucial not only for regulated entities but also for the functioning of Sebi as well. A transparent and accountable regulatory framework fosters confidence and clarity in the market,” Pandey had said.

Meanwhile, before joining Sebi, Pandey has held many significant positions in the Central government and the Odisha state government, in addition to serving a stint in the regional office of the United Nations Industrial Development Organisation (UNIDO).

In his career spanning over three-plus decades, Pandey has wide experience in areas of economy and finance, industrial development, tax policy and administration. He has been instrumental in bringing about several institutional innovations, new policies and systems in the departments he has served. He holds a masters degree in economics from Panjab University, Chandigarh, and an MBA from the University of Birmingham (UK).

Before being appointed as the revenue secretary in January, Pandey had the charge of secretary, DIPAM (department of investment and public asset management). A 1987-batch Indian Administrative Service officer of the Odisha cadre, he had taken charge as the finance secretary in September 2024 after his predecessor TV Somanathan was appointed as the cabinet secretary. Pandey had earlier played a key role in finalising the sale of Air India as DIPAM secretary.