Newsletter June 2026

Published: June 08, 2026

Dear Friends,

Greetings from the Centre for Regulatory Governance

The Securities and Exchange Board of India (SEBI) deserves much more than a generous round of applause for its painstaking Interim Report on Rajesh Exports. At the time of writing, the company has disputed SEBI’s claims.

There is no way to predict when a company could be in a mess, but there should be no reason to second-guess whether a regulator will step in. In this case, SEBI has done even better. Before the markets could raise an alarm, the regulator had done so.

The advantage now lies with the SEBI. This is most comforting for the citizens, secure with the knowledge that the regulator knows when to move. The scale of the charges brought in by it is salutary. Last year, it did a splendid job, releasing the report of a study on the Futures and Options market in India. In the report, SEBI showed that nine out of ten investors lose money in the market. From my experience, one can say that a lot of potential investors were wisely thwarted by the data from venturing into this derivative market.

At CRG, we have been emphasizing that this is how regulators should function. It is heartening to note that at another end of the financial market, the pension regulator has also taken up some very impressive work.

In a very creative way, the Pension Fund Regulatory and Development Authority of India (PFRDA) has decided to tackle the challenge of health care in India. For millions of Indians, setting aside money to tackle hospital care is a nightmare. It remains so despite taking out insurance coverage.

PFRDA has moved in several directions at one go. It has given the option for those who buy a pension plan to use a part of their accumulation to pay for their medical costs, particularly when there is no hospitalization. It has also offered the option of those holding a pension cover to top up their medical bills with it, when in the hospital.

Indian regulators, who are so conscious of their turf, rarely design policies to even shake hands with those of another sector. Remember the grisly fight over ULIPS between IRDAI and the SEBI in the first decade of this century!

So, the sight of a regulator offering customers the option to use their pension products as an add-on to their insurance bills is most salutary. It will definitely add energy to the banks and other financial institutions to sell the badly needed pension products. PFRDA has already broken the idea that a pension product is for the old age. It has run a major campaign saying pension products should be bought early in one’s career thereby ensuring long-term financial safety.

These are happy thoughts to begin the month. On the theme of whether regulators, post-retirement, should be re-employed, CRG team leaders, Professor\s Avirup Bose and Meghmala Mukherjee, both from Jindal Global Law School, parsed  the topic threadbare. Later this year, two Sebi members as well as those from other regulators move on from their roles, so the debate is most appropriate. Their analysis was a response to an article written by Mr S N Ananthasubramanian and Dr M S Sahoo, titled "Regulators as Board Leaders", which too, is on our website https://crg.jgu.edu.in/.

AI obviously is going to be a strong engagement for CRG. A succinct commentary on the encyclical released by Pope Leo XIV, his first titled ‘Magnifica Humanitas’ was written by Prof Nayanika Majumdar from Jindal Global Law School. The commentary on safeguarding the human person in the time of artificial intelligence offers a sharp perspective on the issues.  

Finally, to coincide with the World Environment Day, Parag Rajendra Badirke, research associate at CRG, has written a wonderful paper, explaining what are the shortcomings of the carbon certificate market in India (Carbon Credit Trading Scheme). He makes the point that the standards set by the regulators are soft, which does not force companies to monitor their carbon emissions carefully. The results are cruel. An Indian certificate is worth far less compared to those issued by the European markets. As a result, Indian companies have to effectively pay a tax abroad to offset the differences.

My Thanks and Regards 

Subhomoy Bhattacharjee

The Regulatory space for the month of May 2026 was marked by rapidly growing interest in the use of Artificial Intelligence (AI) Some of these we have captured in our Newsletters. This includes tracking the AI summit and its importance in the Indian context, or its impact on Banks, or the progress of AI made in Indian and global context. 

SEBI: The market regulator has set up 'cyber-suraksha.ai' task force to check AI-driven cyber risks. The task force comprises experts from stock exchanges, regulated companies, and tech stakeholders. They will identify loopholes, inform others fast and take appropriate action, developing foolproof plans to tackle those issues. It needs to be noted that being a critical sector, any loophole in the system can have repercussions in other sectors as well.

CAG: The Comptroller and Auditor General of India Mr K Sanjay Murthy said India should leverage artificial intelligence, machine learning and data analytics to detect corruption, bid rigging and cartelisation in government tenders. He emphasized upon better coordination between CAG and CCI (Competition Commission of India) to identify collusion and protect public funds. It needs to be mentioned that the CCI Chairperson Ms Ravneet Kaur had advocated the use of AI in the AI summit during February this year - while rightly highlighting the importance of transparency.

CERC: The Central Electricity Regulatory Commission (CERC) has released Draft Regulations to implement "Market Coupling" in India. It is meant to unify power prices across all energy trading platforms - IEX, PXIL and HPX. CERC, through its new regulations hopes for Uniform Market Clearing Price, Optimal Transmission Utilization and Economic Surplus Maximization.  This is another reform being brought into the market to align India's Power sector with global standards. However, there are lots of systemic risks associated with these initiatives - the details of which have been discussed in our News Summary. 

There have been some other important developments related to regulators like IBBI, TRAI, NFRA and CCI. These have been captured in our "Latest News" section.