SEBI Chairperson Madhabi Puri Buch has addressed why the securities markets regulator is issuing a growing number of consultation papers. She was speaking at the 21st Annual Capital Markets Conference CAPAM2024 – Capital Market Reforms 2.0 For Viksit Bharat in Mumbai.

Highlighting a shift in regulatory approach, Buch said the SEBI’s goal is to engage with stakeholders rather than react to issues after they arise.

Recent consultation papers cover various crucial areas, including derivatives regulations, insider trading rules, F&O trades, and new asset class rules.

Kamlesh Varshney, Whole Time Member (WTM) at SEBI, also mentioned that the regulator is considering several relaxations in regulations for investment advisers and research analysts, with a consultation paper on this topic to be released soon.

Buch added that SEBI will soon release a consultation paper on the base for Rights Issues and Preferential Allotments. Additionally, the regulator plans to introduce a demystified filing document to simplify the process for companies.

Buch likened SEBI’s stance to avoiding the role of a “Bollywood police” that intervenes after problems surface.

She said that the frequency of consultation papers has increased which reflects the SEBI’s effort to involve stakeholders in the regulatory process early on.

This approach is designed to keep pace with evolving market conditions and prevent the regulator from falling behind.

Buch suggested that regulations and innovations should be updated every six months. She argued that infrequent updates would leave the regulator lagging by several steps.

Buch also addressed the status of pending regulations, such as those related to Futures and Options (F&O) trading. She clarified that the draft circular on F&O trading is still under review and that final regulations will only be issued after considering stakeholder feedback.

Additionally, Buch provided insights into why the SEBI often returns Initial Public Offering (IPO) documents. India currently leads in the number of IPOs, though the quantum of fundraising has yet to match the levels seen in the US and China.