The market regulator, Securities and Exchange Board of India (SEBI), is developing advanced tools to detect market manipulation incidents at a much faster pace.
Speaking at an event organized by the BSE Brokers Forum (BBF) on Saturday, SEBI Chairman Tuhin Kanta Pandey said, “On the surveillance front, we are moving from reactive supervision to predictive oversight. We have revamped our data warehouse system to develop new rule-based alerts to identify pump-and-dump patterns and to detect fraudulent trades in bulk deals.”
Pandey noted that pump-and-dump schemes follow identifiable patterns, as reflected in SEBI orders, and the new technology will help track such manipulative behaviour using data-driven insights.
SEBI is also working on a safety net mechanism for depository participants (DPs). “We are examining the implementation of a safety net so that in the case of an outage at a depository participant, the issue can be handled at the depositories’ end — similar to what exists for stock brokers,” Pandey said.
On the issue of weekly expiries in derivatives, the SEBI Chairman said that several regulatory measures have already been implemented after detailed data analysis. “Continuing this approach, we will remain thoughtful and consultative in suggesting further measures to improve this market, consistent with risk awareness and investor suitability,” he said.
Pandey also hinted at SEBI’s plans to further boost cash market volumes. He said the daily traded volumes in the cash equities market— “the foundation of capital formation”—have nearly doubled to over Rs 1 lakh crore in just three years. “However, more needs to be done to deepen the cash equities market and review our Security Lending and Borrowing Mechanism (SLBM) framework in line with risk management,” he added.
The SEBI chief also spoke about efforts to ease KYC norms for NRIs. He said the regulator is in advanced talks with UIDAI and RBI to enable secure, remote KYC access for NRIs, which is currently being tested. “This will be an urgent goal for us so that NRIs don’t have to come to India for KYC. It will be a major development once operational,” Pandey said.
On Foreign Portfolio Investor (FPI) registration, he said SEBI aims to simplify the process further. “FPI registration is a window to the world, and if the window itself has cobwebs, it won’t shine in its glory. This is not about risk; it’s about identifying and addressing operational issues,” he explained.
Urging the industry to innovate, Pandey called on market participants to co-create new products and opportunities and remove barriers to promoting small SIPs. “SEBI will continue its focus on offering investors more choices for asset allocation aligned with their individual risk appetite,” he said.
Pandey also emphasized the need to strengthen the commodity derivatives market, noting that several commodities hold untapped potential. “Many issues — such as taxation, delivery mechanisms across states, and GST-related concerns — need resolution. SEBI has created working groups, and with their recommendations, we will move forward. Our commodity markets should be far more active, and we must remove barriers to their growth,” he stated.
On stock broker regulations, he said SEBI is on course to rationalize and simplify the framework to reduce costs and compliance burdens, while maintaining robust risk management. “We have received several suggestions on SEBI’s consultation paper, and efforts will be made to take it to the Board for approval by September,” Pandey said.
Pandey reiterated that protecting investors from cyber frauds and misleading advice by unregistered finfluencers remains a key focus area for SEBI, which continues to work closely with market institutions and intermediaries.
Concluding his address, Pandey remarked, “We can all take pride in the market we have built. Our collective goal now must be to ensure this growth remains sustainable. We must build resilient institutions, not just successful businesses.”
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