Three questions Sebi should be asking, and answering

Three questions Sebi should be asking, and answering


The Securities and Exchange Board of India recently sent a questionnaire to mutual funds asking if they had mis-sold mutual funds. You could say, why so late? Afterall, everyone knew this was happening.

My take on this is different. I say, why not ask more questions.

So in this edition of Contramoney, I will lay out the three more questions that Sebi should be asking. Of itself.

Question No. 1

In 2023, Sebi released draft guidelines that would have effectively put an end to the unregistered finfluencer menace. The regulator planned to achieve this by cutting off their funding from Sebi-registered intermediaries. This was genius. It’s now been over a year, and yet, the guidelines have not been finalized and notified. Why?

Question No. 2   

While everyone is gloating over the massive growth in the number of mutual fund investors and demat accounts, the fact is that the number of registered investment advisors and research analysts continues to be abysmal. This limits access to independent advice, which could have not-so-good consequences for investors in the long-term. What is Sebi doing to address this?  

Question No. 3

The biggest risk to sustainable wealth-creation by investors is the lure of trading. Per Sebi’s own data, over 90% of traders lose money. Yet we are faced with a situation where the two main exchanges are competing for trading market share. The result is an even more conducive environment for trading. And this can only mean more gullible traders being sucked in. What is Sebi doing to put a stop to this detrimental competitive situation? 

Why am I limiting myself to just three questions? I could ask many more. But the fact is that including the mis-selling question asked by Sebi, these questions perhaps address the most pressing needs of a lay investor.

Generally, the aim is to limit mis-selling, boost the supply of independent advice, and install guardrails so investors don’t get sucked into gambling easily.  

As Warren Buffett said, “Investing is simple, but not easy.”  

Indulge me when I say, regulation too is simple, but not easy.

Happy investing.  

Note: If you have any more questions for Sebi, send them to me at I will try and do a follow-up piece with more questions for the regulator.

Rahul Goel is the former CEO of Equitymaster. You can tweet him @rahulgoel477.  

You should always consult your personal investment advisor/wealth manager before making any decisions.


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