SEBI Vision Address at India's Capital Markets: Predictive Oversight and New Tech to Curb Market Fraud
SDG 9: Industry, Innovation and Infrastructure | SDG 16: Peace, Justice and Strong Institutions
Institutions: Ministry of Finance | Securities and Exchange Board of India (SEBI)
SEBI Chairman Tuhin Kanta Pandey announced a shift toward a new era of proactive market regulation, moving from reactive supervision to predictive oversight. Speaking at the Bombay Stock Exchange Brokers’ Forum’s Capital Market Confluence 2025, the Chairman detailed initiatives aimed at strengthening market resilience and cracking down on fraudulent activity.
A major focus is the enhancement of surveillance tools. SEBI has revamped its data warehouse system to develop new rule-based alerts capable of identifying ‘pump and dump’ patterns and fraudulent trades in bulk deals. On the technology risk front, the regulator will soon issue ‘Air Gap’ guidelines—a cybersecurity mechanism designed to insulate core activities—in consultation with Market Infrastructure Institutions (MIIs), which are already undergoing live disaster recovery drills and stress testing.
The Chairman also stressed the goal of financial inclusion and ease of investment, noting that while daily cash equity volumes have nearly doubled, only 9.5% of households participate in the securities market. To address this, SEBI is prioritizing simplified KYC for Non-Resident Indians (NRIs) and working with other regulators to make the Foreign Portfolio Investor (FPI) registration process fully digital and faster. The long-term policy vision remains focused on building a market that is resilient, inclusive, and aligned with the aspirations of a developed India.
The announcements signal a governance shift where the regulator is actively using advanced analytics and cybersecurity mandates to ensure market integrity, which is critical for maintaining investor trust and facilitating domestic and foreign capital formation.
What are ‘Pump and Dump’ Schemes in the capital market? → ‘Pump and dump’ schemes are a form of stock market manipulation where fraudsters artificially inflate the price of a thinly traded stock (the ‘pump’) through false or misleading statements to create hype, and then quickly sell their own holdings at the inflated price (the ‘dump’) before the price collapses.
Relevant Question for Policy Stakeholders: How will SEBI ensure its new data-driven surveillance alerts maintain regulatory flexibility and avoid inadvertently chilling legitimate high-frequency trading activities?
Follow the full news here: https://www.sebi.gov.in/media-and-notifications/speeches/oct-2025/chairman-address-at-capital-market-confluence-2025_97253.html