SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation, and Infrastructure | SDG 17: Partnerships for the Goals
Securities and Exchange Board of India (SEBI) | Association of National Exchanges Members of India (ANMI)
At the 15th ANMI International Capital Market Convention, SEBI Chairman Shri Tuhin Kanta Pandey highlighted the expansion of India’s capital markets, with unique investors growing from 4.3 crore in FY20 to 13.7 crore today. In the first nine months of the current financial year alone, 311 IPOs raised ₹1.7 trillion, contributing to a total equity mobilization of over ₹3.8 trillion.
The Chairman emphasized that this scale of participation demands a shift toward “Optimum Regulation”—a smarter architecture that balances market growth with robust investor protection.
Key regulatory and operational highlights include:
Operational Flexibility: New regulations for stock brokers now allow diversification into other financial activities, providing intermediaries with greater business agility.
Simplified Compliance: A new framework for reporting technical glitches has been introduced to reduce the burden on smaller brokers, alongside a rationalized penalty structure to avoid duplication across exchanges.
Technological Transformation: Technology is being leveraged to enhance settlement speeds and surveillance, while a mandated Cybersecurity framework aims to protect the ecosystem from evolving digital threats.
AI-Driven Oversight: SEBI is deploying AI tools to monitor compliance and detect fraud, intending for technology to augment rather than replace human judgment.
What is ‘Optimum Regulation’ in the context of capital markets? It is a regulatory philosophy that seeks to find the “sweet spot” between strictly enforcing rules and providing enough flexibility for market innovation. Instead of a one-size-fits-all approach, it involves consultative policymaking to ensure that compliance costs do not become a barrier to entry for smaller intermediaries, while still maintaining high standards of transparency and accountability.
SEBI’s Future Roadmap
The Chairman outlined a strategic roadmap focused on consolidation, inclusion, and market deepening:
Legislative Consolidation: The introduction of the Securities Markets Code, 2025, which seeks to unify the provisions of three separate Acts into a single, principle-based law to provide legal clarity.
Retail & NRI Inclusion: Efforts are underway to further simplify the KYC processes for retail clients and create frictionless pathways for Non-Resident Indians (NRIs) to participate in Indian markets.
Market Deepening: Concrete steps are being taken to expand the corporate and muni-bond markets, including the examination of bond derivatives to provide better hedging options for investors.
Strengthening Safeguards: Continuous review of regulations for Depository Participants and the implementation of advanced safeguards against cyber-fraud remain top priorities.
Policy Relevance
SEBI’s roadmap is designed to move India from a “high-growth” market to a “sustainable-growth” market by institutionalizing trust.
Lowering Friction: By reducing duplicative penalties and simplifying glitch reporting, SEBI is lowering the cost of doing business for intermediaries, which ultimately benefits the end-investor.
Digital Sovereignity: The focus on a unified Cybersecurity framework ensures that India’s financial backbone remains resilient against global systemic risks.
Unified Regulatory Logic: The transition to a “principle-based” Securities Markets Code marks a significant maturity in India’s financial governance, moving away from fragmented, ad-hoc rule-making.
Relevant Question for Policy Stakeholders: How can Market Infrastructure Institutions (MIIs) leverage the new ‘Securities Markets Code’ to create self-regulatory mechanisms that reduce the ‘compliance lag’ for emerging asset classes like REITs and InvITs?
Follow the full news here: Address by SEBI Chairman at ANMI Convention