MUMBAI: We are moving from reactive supervision to predictive oversight,” said SEBI Chairman Tuhin Kanta Pandey, underlining the regulator’s shift towards technology-driven market monitoring.
Speaking at an event organised by the BSE Brokers Forum (BBF), Pandey said SEBI is developing advanced tools to swiftly identify pump-and-dump patterns and other forms of market manipulation.
The regulator’s upgraded data warehouse system, he added, now supports new rule-based alerts capable of spotting fraudulent trades in bulk deals and suspicious price movements more quickly than before.
According to Pandey, pump-and-dump schemes follow identifiable patterns, as seen in SEBI’s enforcement orders, and the new analytical systems will enhance the regulator’s ability to detect such behaviour using data intelligence rather than retrospective investigation.
Pandey also said SEBI is examining the creation of a safety net mechanism for depository participants (DPs) to handle system outages. “We are looking at a framework where, in the event of a DP outage, the issue can be managed at the depositories’ end, similar to what is in place for stock brokers,” he explained.
On the derivatives front, Pandey noted that several measures have already been taken to address concerns around weekly expiries. “Continuing this approach, we will remain thoughtful and consultative in suggesting further steps to improve this market, consistent with risk awareness and investor suitability,” he said.
Cash equity market
The SEBI chief also outlined efforts to deepen India’s cash equities market — which he described as “the foundation of capital formation.” Daily traded volumes, he said, have nearly doubled to over Rs1 lakh crore in the past three years, though there is scope for further growth by strengthening the Security Lending and Borrowing Mechanism (SLBM) and addressing risk management gaps.
To ease participation for overseas investors, SEBI is in advanced discussions with UIDAI and RBI to enable secure remote KYC access for NRIs, which is currently under testing. “Our urgent goal is to ensure that NRIs don’t need to travel to India for KYC compliance,” Pandey said.
FPI registration
He also indicated plans to simplify the Foreign Portfolio Investor (FPI) registration process. “FPI registration is a window to the world. If that window has cobwebs, it cannot shine in its glory,” Pandey remarked, stressing that the focus is on removing operational hurdles, not compromising risk standards.
Calling on industry players to innovate, Pandey urged market participants to co-create new products, expand investor options, and encourage smaller SIPs. He also highlighted the need to energise India’s commodity derivatives market, saying many commodities remain underutilised due to taxation and delivery-related barriers.
“SEBI has set up working groups to address these concerns, and with their recommendations, we aim to move forward decisively,” he said.
Pandey reaffirmed SEBI’s continued focus on investor protection, particularly against cyber fraud and misleading financial influencers. “Our collective goal must be to ensure that the market’s growth remains sustainable by building resilient institutions, not just successful businesses,” he concluded.
