Former SEBI Chairman UK Sinha said India will not compromise on essential regulatory standards like KYC to compete with jurisdictions like Hong Kong or Singapore, emphasising that the country's rules are designed to safeguard market integrity.
India will not compromise on essential regulatory standards, such as Know Your Customer (KYC) compliance, to match jurisdictions like Hong Kong or Singapore, former Securities and Exchange Board of India (SEBI) Chairman UK Sinha said on Wednesday.
Speaking to the media on the sidelines of the 4th CII Alternative Investment Fund Summit 2026 in Mumbai, Sinha addressed global market comparisons, foreign capital flows, and the structural maturation of India's Alternative Investment Fund (AIF) industry. Addressing concerns about the ease of investing in India compared with other global financial hubs, Sinha emphasised that the country's regulatory standards are designed to safeguard market integrity. "There are specific areas where some improvement is required, but I don't think KYC is a major hurdle for foreign investors. India cannot make any compromises on basic framework standards," he said.
Foreign Capital and Market Safeguards
On the subject of foreign institutional outflows, Sinha noted that existing market safeguards and regulatory structures remain robust. He expressed confidence that international capital would naturally return as global macroeconomic pressures ease and risk appetite improves across emerging markets.
India's Strength in Investor Exits
Underlining India's strength in capital distribution, Sinha pointed to the country's strong track record of investor exits. "The last two years have proven that India can provide excellent exits to domestic and foreign investors through successful IPOs, which is a much better track record than many other markets," he said.
Investor Protection and AIF Sector Growth
Touching upon investor protection, Sinha affirmed that SEBI continues to maintain rigorous oversight while broadening participation in the capital markets. He noted that the regulator's ongoing efforts to expand the eligibility criteria for accredited investors would help increase the pool of sophisticated domestic investors.
Landmark Regulatory Shift
Highlighting a landmark regulatory shift, Sinha praised SEBI for enabling the listing of AIF management entities, citing Gaja Capital's recent listing as a pioneering development for the sector.
"This is a breakthrough moment because listing brings radical visibility and transparency," Sinha said. "It gives fund managers crucial ammunition for GP commitments while setting higher standards of data disclosure for the entire industry to follow," he added.
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