Sebi chairman Tuhin Kanta Pandey on Thursday called for collaboration between the regulator and industry on corporate governance and the need for corporate boards to exercise self-regulation.

Speaking at the CII corporate governance summit in Mumbai, the Sebi chief said that the regulator is cognizant that “over-regulation” can stifle growth and innovation. At the same time, too little regulation can lead to a decline in trust.

“There is a need for optimum regulation – regulations need to be rationalised by removing what is no longer relevant, and reducing overlaps. Stable and adequate financial regulation can help in creating a high trust environment, increase attractiveness for investors and promote economic growth,” Pandey said.

The Sebi chief’s comments come at a time when the government is looking to simplify the existing regulations relating to corporate governance while also decriminalising offences under the Companies and LLP Acts. Government data shows that there has been a decrease in the number of cases filed for corporate fraud or non-compliance in 3 years, from 1774 in 2021-22 to 1509 in 2023-24.

Pandey urged corporate boards to ask difficult questions to the company’s management and said that auditors and independent directors must act as gatekeepers of integrity.

“Corporate governance is not a matter of regulation alone — it is a matter of conscience. SEBI will continue to expect a higher bar on governance. But true and lasting change must come from within the corporate boardrooms and cultures,” Pandey said.

Harnessing technology

Pandey also pitched for the industry to adopt regtech solutions, which involve the use of technology-based solutions for complying with regulatory obligations.

“That can help in improving compliance, reporting, streamlining processes and improving operational efficiency,” he said.

“SEBI and first line regulators – Exchanges, are deploying suptech solutions, for effective and enhanced supervision. The use of technology by regulators has been very helpful in detecting early signs of market abuse and non-compliances,” he said.

NSE IPO

The Sebi chairman also said the markets regulator will not let commercial interest trump general public interest while deciding on the IPO of the National Stock Exchange.

“We will not allow commercial interest to take over the general public interest, and it is for the regulator to ensure that,” Pandey said on the sidelines of the summit.

When asked for a timeline by when the regulator wants the issues to be resolved, he said that it will be done at the earliest.

NSE’s IPO plans have been stuck for over eight years now. The regulator had earlier flagged off certain observations on issues like key management personnel (KMP), ownership of clearing corporations, and ongoing cases related to the colocation matter, among others.

The equity bourse had earlier this year sought the regulator’s no objection to proceed ahead with the plans.