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Informist, Monday, May 4, 2026

 

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--SEBI chief: India needs innovation that solves real problems 
--SEBI chief: India needs long-term capital market based finance 
--SEBI chief: Regulation must evolve to find right balance 
--CONTEXT:SEBI Chairman Pandey speaks at IMC Capital Markets Conference 2026
--SEBI Chief: Current taxes make commodity derivates delivery cumbersome
--SEBI Chief: RBI, IRDAI not keen on allowing invest in commodity derivatives

 

MUMBAI – The Reserve Bank of India and the Insurance Regulatory and Development Authority of India are currently not in favour of allowing banks and insurers to participate in commodity derivatives, Securities and Exchange Board of India Chairman Tuhin Kanta Pandey said. 

 

Speaking at the IMC Capital Markets Conference 2026, Pandey said discussions with the two regulators have taken place, but they have their own rationale for holding back. He said the matter will not be actively pursued further, noting that insurance companies in particular have concerns about how commodity derivatives align with their long-term investment horizons.

 

Pandey also flagged structural challenges within commodity derivatives markets, especially around taxation. He said the current goods and services tax framework makes physical delivery cumbersome, as participants often need to register across multiple states where warehouses are located. This complexity discourages actual delivery, with most participants choosing to square off contracts before maturity. SEBI has suggested an integrated GST mechanism to simplify the process and reduce friction in deliveries, Pandey said.

 

The SEBI also chief stressed that India needs innovation in financial markets that addresses real economic problems rather than creating complexity. He pointed to the role of technology and product innovation in reducing costs, improving access, and supporting capital formation, while cautioning that poorly designed innovation could introduce new risks.

 

Pandey underscored the importance of long-term market-based financing for India's growth, noting that deeper capital markets are essential to mobilise both domestic and global capital efficiently. According to him, expanding investor choice while maintaining strong safeguards will be key to sustaining this growth trajectory.

 

On regulation, Pandey said the framework must continuously evolve to strike the right balance between enabling growth and managing risks. Over-regulation could stifle innovation and efficiency, while under-regulation could undermine market integrity. SEBI's approach, he said, was aimed at "optimal regulation" that supports development while ensuring transparency, accountability and investor protection.

 

He also highlighted the growing role of technology and emerging risks, including vulnerabilities arising from advanced AI systems. SEBI is working with market participants and plans to issue guidance to help institutions proactively identify and address such risks, he said.  End

 

Reported by Kabir Sharma and J. Navya Sruthi

Edited by Akul Nishant Akhoury

 

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