Securities and Exchange Board of India (Sebi) chairperson Tuhin Kanta Pandey on Saturday said the stake of stock exchanges in clearing corporations is one of the main reasons for the delay in listing of National Stock Exchange (NSE).
“Before it goes public, it (NSE) will need to be cleared from different angles… there are pending issues like litigation, which is one part; the other part could involve governance and technology issues that may arise; and additionally, there is the clearing corporation issue,” Pandey said at the Mint India Investment Summit and Awards 2025.
He added that NSE has responded to some of the letters and the market regulator is currently examining them. NSE’s IPO, which sought for Sebi approval in 2016, has been stalled for around nine years now. In 2019, the regulator returned the DRHP, directing the exchange to refile after resolving the co-location issue.
Further, he also explained that the futures and options market was complex and just putting a threshold for retail investors won’t help. “F&O itself is a complex market. We cannot have a sledgehammer or a blunt approach; we need a surgeon’s knife. We need to know exactly how, otherwise innovations will be lost,” Pandey said, adding that innovations should not get impacted.
Citing reports, which show most of the small investors were losing money in F&O, he said it is not only an awareness element, but more of a systemic issue that requires working with stakeholders. He also noted that F&O is very important for hedging risks and for price discovery, there needs to be orderly development, which has been the effort of the market regulator, he said.
Stressing on the need to build robust market integrity, he said the market regulator has successfully teamed up with the market infrastructure institutions (MIIs) and market intermediaries to achieve it and its initiatives in this regard span a wide range—regulations, technology, supervision, surveillance, enforcement, investor awareness and resolution of investor grievances. “Going forward, we need to constantly update and innovate in all these areas keeping in mind optimum yet effective regulatory stance,” he said.
Pandey once again highlighted the need for ease-of-doing business and doing away with redundant regulations. “I have been talking to various associations, I have asked them and actually, they have also come out with certain things,” he said adding that several things are on agenda, including combining things across regulators. That is, if certain regulations have the same objective, they can be made consistent.
He gave the example of merchant bankers, dependent trustees and custodians regulations, where it was earlier proposed to hive off for the unregulated activities of these entities (the latest Board meeting deferred the decision). “We want to have a review to see whether hiving off may not be necessary, and we can have other instruments to achieve the same thing because hiving off will also put an additional burden due to creation of more SPVs (special purpose vehicles), more entities, and then if it increases the cost of business, ultimately that cost of business is also passed on to the clients,” he explained.
Admitting there are inadequate number of research investment advisors, he said given the size of our country, we have to look at issues, including entry barriers and education.