As Madhabi Puri Buch’s tenure as SEBI chief comes to a close, her legacy is marked by a whirlwind of reforms, faster settlement cycles, and a slew of challenges in navigating the regulatory landscape. Over the past three years, Buch has issued nearly 600 orders and 200 consultation papers, shaking up the norms of the financial world in India. As the first woman and non-bureaucrat to helm the capital markets regulator, she has brought a fresh perspective with a data-driven approach and a focus on technology.
The Fast-Paced Reforms of Madhabi Puri Buch
One of Buch’s standout initiatives has been the introduction of a shorter settlement cycle, which has streamlined access to funds and securities for investors. Despite initial resistance, India successfully transitioned to a T+1 settlement in 2023, ahead of global counterparts like the US and Canada. This shift has not only enhanced liquidity and market efficiency but has also reduced counterparty risks, positioning India as a frontrunner in the realm of expedited settlements.
Industry experts, like Sanjay Israni of Desai & Diwanji, have praised Buch’s evidence-based decision-making and her efforts towards market reforms. Anil Choudhary from Finsec Law Advisors also lauded her focus on safeguarding retail investors through various reforms, such as curbing frenzy in index derivatives and preventing misuse of client funds by brokers.
Retail Investor Protection and Key Reforms
Under Buch’s leadership, SEBI has taken significant steps to protect retail investors, including measures to prevent market abuse, insider trading, and frontrunning. The regulator has also introduced monthly SIPs as low as ₹250 to promote financial inclusion and has tightened norms for related party transactions. Additionally, SEBI has rolled out initiatives like the KPI framework for IPO-bound companies, dematerialization of AIF units, and the introduction of micro, small, and medium REITs.
Despite these strides, SEBI has faced criticism for regulatory overreach and delays in resolving high-profile investigations, particularly those involving the Adani Group. Anil Choudhary highlighted concerns about SEBI’s enforcement standards and setbacks in cases like NSE co-location, Karvy Stock Broking, and Reliance Industries. The regulator’s handling of the Adani case, which drew public and media scrutiny, underscored the challenges of maintaining impartiality and institutional credibility in the face of controversy.
Challenges and Resistance in Modernizing SEBI
Internally, Buch has encountered resistance to her efforts to professionalize SEBI and introduce performance-based targets. Kunal Sharma from Singhania & Co. noted that employee dissatisfaction and protests have underscored the difficulties in shifting the regulator’s hierarchical structure to a more corporate-style functioning. Despite these hurdles, Buch’s tenure has pushed SEBI towards greater collaboration with industry bodies, an emphasis on ease of doing business, and a more streamlined approach to regulation.
As Madhabi Puri Buch prepares to step down from her role as SEBI chief, her tenure has left an indelible mark on India’s financial landscape. Through a whirlwind of reforms, challenges, and unwavering determination, she has reshaped the regulatory terrain with a vision that balances innovation, investor protection, and market efficiency. While her future may hold new endeavors, her legacy at SEBI will be remembered as a time of transformation and progress in the realm of capital markets regulation.
