Regulatory risk is biggest threat to broking firms, says Zerodha's Kamath

Zerodha co-founder Nithin Kamath has identified regulatory risk as the biggest threat facing regulated financial businesses in India. He cited the Insurance Regulatory and Development Authority's proposed changes to insurance commission structures as an example of how regulatory decisions can rapidly reshape business economics.

Kamath cautioned that sudden policy shifts affecting broking operations, F&O trading, client float management and MTF (margin trading facility) can significantly alter valuations and profitability. The comments underscore growing concerns within the financial services sector about regulatory unpredictability and its impact on business planning.