Key Details
Pandey’s address combined changes already made, work under way and forthcoming guidance.
Measure | Position Set Out in the Speech |
|---|---|
Clearing interoperability | SEBI is working to include tender offers, buybacks and offers for sale, with implementation targeted by end-November 2026. |
AI and machine learning | Guidelines are to be issued shortly, using a tiered approach with accountability, data controls, human oversight and safeguards such as “kill switches”. |
Overseas investor onboarding | Following a consultation that received more than 400 comments, SEBI said a circular on digital onboarding without physical presence would be issued shortly. |
Derivatives settlement prices | SEBI is examining responses to its Closing Auction Session consultation and hopes to issue guidance in about a week. |
Broker compliance | SEBI is exploring requirements graded by a broker’s scale, client exposure and dependence on technology. |
Pandey placed these steps against a market of more than 15 crore unique investors, around ₹472 lakh crore in market capitalisation, ₹87 lakh crore in mutual fund assets and ₹61 lakh crore in outstanding corporate bonds.
Clearing Changes Address a Remaining Operational Gap
India already has interoperability between clearing corporations, allowing trades to be cleared across them. Pandey said certain transactions — including buybacks, tender offers and offers for sale — remain outside that arrangement and still require parallel clearing. Extending interoperability to them is intended to reduce duplicated arrangements, costs and capital tied up in the process, while preserving settlement safety.
This is the speech’s clearest dated implementation signal. The end-November date is a target, not confirmation that the extension is operational.
Simpler Rules Will Be Paired With Greater Responsibility
SEBI has reviewed rules for brokers, mutual funds, portfolio managers and settlement proceedings. Pandey pointed to measures already taken, including rationalised broker penalties across exchanges, a technical-glitch framework proportionate to brokers’ size and technology dependence, and a common reporting mechanism intended to avoid repetitive submissions.
The next steps include reviewing depository rules and exploring graded broker compliance. Pandey’s distinction was that simpler, more proportionate regulation should leave firms with clearer obligations—not weaker governance or controls.
AI Oversight and Investor Trust Move to the Foreground
SEBI’s Demat 2.0 pilot is exploring tokenised corporate bonds, while forthcoming AI guidance is expected to address how regulated entities control data, models and risks. Pandey stressed that firms remain accountable for AI outcomes and that human oversight cannot be displaced by technology.
For retail investors, he linked confidence to everyday experience: clear charges and risk explanations, secure onboarding, protected client assets and prompt grievance handling. SEBI has introduced validated payment handles, SEBI Check and verified trading-app labels to help counter impersonation and fake apps. Its recently launched Project Jagrook extends investor education across media and languages, with brokers expected to reinforce that work during onboarding and servicing.
Policy Relevance
Market efficiency: Bringing more transaction types into interoperable clearing could reduce operational duplication. The announced target makes actual implementation—and its effect on costs—possible to track.
Proportionate supervision: Graded obligations may better reflect differences between brokers, provided the resulting rules remain clear about investor-asset protection and technology risk.
Technology accountability: The forthcoming AI guidelines will be significant for how they assign responsibility to regulated firms when automated systems fail or produce harmful outcomes.
Investor confidence: Wider access is only one measure of market development. Fraud prevention, understandable disclosures and effective grievance redressal determine whether new participants can use that access safely.
Relevant Question for Policy Stakeholders: As SEBI simplifies compliance and expands technology use, which investor-protection and operational outcomes will show whether the changes are working?
Follow the Full Speech Here: SEBI Chairman’s Address at the BSE Broker Forum Capital Market Confluence