MUMBAI: The new SEBI Chairman, Tuhin Kanta Pandey, who was appointed on Thursday after being pulled out of North Block to head the Securities and Exchange Board of India (SEBI), faces a tough challenge ahead. His top priority will be to restore investor confidence—both institutional and retail—amid a market downturn, with indices having lost 18% from their peaks in late September.
Additionally, Pandey will need to restore the sanctity and impartiality of SEBI's top office, while boosting staff morale, which had been severely affected under his predecessor, Madhavi Puri Buch. Buch’s three-year term, which ends today, was marred by accusations of fostering a 'toxic work culture' at SEBI Bhawan.
With finance and revenue secretary Pandey’s appointment, a 1987-batch IAS officer from the Odisha cadre, as the new chairman, the government has reverted to civil servants all the key regulatory positions, after beginning with former revenue secretary Sanjay Malhotra’s appointment as RBI Governor in December. In fact, this restoration began with Shaktikanta Das’ appointment in December 2018 after the RBI’s spat with government came out wide in the open under Raghuram Rajan and Urjit Patel who were academics of international repute.
Barring Puri-Buch, GN Bajpai, SA Dave and SS Nadkarni, all the 13 Sebi chiefs were IAS officials or from the public sector, like the 13th chairman Pandey. His IAS predecessors were Ajay Tyagi (five years), UK Sinha (six years), CB Bhave, M Damodaran, DR Mehta (seven years each), and GV Ramakrishna (four years). While the first chief Dave was from IDBI and so did the third one Nadkarni (only one year) and Bajpai was from the LIC chairman before coming to the Sebi.
So Pandey has to give top priority to bring back the morale of the around 1,000 men and women under him now while restoring the confidence of investors and well as the sanctity of the office of the Sebi chairman.
Restoring Confidence of Investors, Sanctity of Regulator
The markets are down as much as 18% from the peak they scaled on September 26, 2024, when the Sensex touched 85,836.12 and the broader Nifty closed at 26,216.05. But since then it has been bleeding and bleeding. The bloodbath began when foreign investors began a selling spree after suddenly finding the beaten down Chinese market more lucrative early October and since then continue to dump domestic stocks have pulled out close to Rs 2.7 trillion of which Rs 1.1 trillion in 2025 alone.
The period also marks the second longest losing streak for the market running into five full months of deep losses, after the 1995 mayhem when the market lost for eight consecutive months. During these five months investors have lost almost Rs 48 trillion and the till recently bullish retail investors are crying now.
Pandey also has to restore the sanctity of the job he holds and to be seen again as impartial when it comes to regulatory actions regardless of one’s political connections or leanings.
In fact, when Puri-Buch was appointed in February 2022 to head Sebi, she was not only the first person from the private sector but also the first woman to head it apart from being the youngest boss of Sebi in its 38 years, which barring three others before, was always headed by civil servants. But instead of living up to being part of history, she went downhill and chaired the most tumultuous and controversial three years in Sebi’s history after she was accused (by the now-shuttered Hindenburg and then by the Congress Party) of conflicts of interests, continuing to earn from her previous employer ICICI Bank, apart from running a private fund that had investments in some Adani group entities and not disclosing anyone of them. She was also accused of favouring some large firms like Mahindra, by issuing favourbale orders from Sebi as her husband Dhaval had commercial relationships with those companies. All this had her junior officials taking out protest marches at Sebi Bhawan in BKC last September 6 and 16 baying for her blood and also accusing her of bringing in a toxic work culture apart from not-conducive HR policy.
Bring Back Officers’ Morale
Puri-Buch was accused of bringing in a toxic work culture and private corporate style decision making. Pandey, given his long experience in the working with public sector staffers, has to bring the work culture back to the Sebi Bhawan. The staffers also had issues with the new HR policies that Puri-Buch introduced, where in all perks were linked to performance. She was also accused of “shouting, scolding and public humiliation at meetings.”
Bringing Closure to Major Cases
His another task would be to bring about final legal closures for the orders his officers issue against companies. Ironically, Sebi had all eggs on its face last year, when it went back to the appellate body SAT in the high profile NSE co-location case, saying it could not make out a case at all in the first place—the punitive orders were issued under the chairmanship of Ajay Tyagi. In almost all cases, SAT stays or nullifies Sebi’s actions against errand corporate executives. One way to do this could be to get better lawyers to handle its cases and the first step to do this is to offer them fees at market rates.
He also has to ensure that the probe into Adani group, which was accused by Hindenburg of share price manipulation and round-tripping and a host of other malpractices is completed fast the report be submitted to the apex court. This is important as being the regulator he has to ensure every regulated entity is treated equal regardless one’s political connections or ideologies.
Rein in Finfluencers and Regulating Mutual Funds Lobby
Though SEBI has taken several measures to curb the influence of social media influencers, the task remains unfinished and Pandey will need to implement is some sterner measures to rein in 'finfluencers' and unregistered investment advisors.
One of the biggest climb-downs that SEBI did in recent years was to buckle under the pressure of fund houses, who ensured that the new tighter expense ratio policy was put on the backburner. Even as the AMCs have been growing as visible from the AUM growth, the regulator has to ensure that investors are not taken for granted by unscrupulous agents.
In short, the new SEBI chief has his task cut as he will have to ensure that the capital market is healthy, without the menace of manipulations such as insider trading, front running and stock rigging. There is also an urgent need to tighten the rules governing IPOs and a good begging has to be made with reining in investment bankers’ greed to ensure better returns for investors.