Surveillance and enforcement, not excess regulation will tackle market challenges: Tuhin Kanta Pandey

While addressing the matter of global trading firm Jane Street’s operations in India and the rising vulnerability of retail investors, Securities and Exchange Board of India (SEBI) chairman Tuhin Kanta Pandey, said on July 7, that the regulator believes that surveillance and enforcement, not excessive regulation, will protect market integrity and that the capital market regulator has all the powers to act against manipulative and fraudulent activities and the interim order speaks for itself.

The SEBI Chief said “Excess regulation does not mean excess surveillance. These are two different things. Within the regulation only we have brought it. So, regulation remains the same, it is the enforcement and surveillance that will help.”

He also added that the Jane Street case is being closely monitored as a market surveillance issue, with no immediate indication of broader systemic risk, “We are watching it as basically surveillance issue and obviously surveillance at both at the exchange level and SEBI level will continue and will also upgrade those surveillance measures.” he added.

While addressing the technical capabilities behind SEBI’s response in such matters, Pandey highlighted the extensive role of high-volume data analytics and internal forensic tools, some developed in-house, others aligned with global best practices. While manipulative practices differ across markets, Pandey stated that the regulator is fully empowered under Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations to act against such malpractices.

The regulator also discussed that while no immediate threat was identified, SEBI remains alert to potential manipulative behaviour particularly in instruments such as weekly expiries, which have come under scrutiny for being prone to speculative and often high-risk retail participation.

“We are watchful,” SEBI chief said when asked if weekly expiries might be curbed in the future. “As soon as the data is worked out, we will see it and take further decisions.” he added.