Sebi building regulatory framework for 2030 to balance tech and risk: Tuhin Kanta Pandey

Sebi chairman Tuhin Kanta Pandey has emphasised five key pillars to ensure the resilience of India’s market by 2030. Highlighting that the future lies in digital resilience, Pandey identified technology, investor empowerment, governance, product innovation, and ease of doing business as essential pillars for strengthening India’s capital markets.

“On any given day, our security market infrastructure handles a staggering volume of activity. In the last financial year, our stock exchanges, on average, handled over 1600 crore of messages daily, with a peak of over 2,900 crore messages. We need a financial sector that is resilient in terms of size, capacity, skills, and regulatory framework. Today, as we look towards 2030, I will share with you some perspectives on challenges and opportunities for the pillars of this framework,” Pandey said at the Capital Market Confluence 2025 hosted by the Bombay Stock Exchange Brokers’ Forum.

He said that while technology will play a critical role in the process, this also raises the need for enhanced cybersecurity.

“Technology comes with its own risk. The use of algorithmic and high-frequency trading has witnessed significant growth. Currently, such trades account for significant volumes in our equity and derivatives markets. Similarly, a cyber-incident at one institution can destabilize the entire ecosystem,” Pandey said.

The market watchdog also has implemented a robust cybersecurity and cyber resilience framework, Pandey said, adding that air gap guidelines are also set to be announced soon. These guidelines are developed in collaboration with Market Infrastructure Institutions (MIIs) to protect core operations even if external networks are compromised.

He said that surveillance has now shifted from reactive to predictive oversight, using enhanced rule-based alerts from a revamped data warehouse to identify market manipulation and fraudulent trades.

Pandey added that Sebi has introduced several new frameworks such as 'Mutual Fund Lite' for passive funds, 'Specialised Investment Funds' to bridge mutual funds and portfolio management services, and 'Chhoti SIP' to attract small investors.

“A resilient market needs diverse instruments for raising capital and managing risk. I urge the industry to co-create such new products and opportunities,” Pandey added.

Sebi also focuses on strengthening agricultural and non-agricultural commodity markets with the introduction of electricity derivatives.

Aside from implementing high standards of corporate governance, Sebi has also relaxed IPO requirements for making markets more inclusive, Pandey said.

“We have cut the IPO listing timeline to T+3, giving issuers faster access to capital. The rights issue timeline has been reduced to just 23 days, from an average of 317 days taken earlier,” he added.

Referring to Sebi’s recent survey about low market participation, Pandey explained that KYC rules have been made simpler. He added that these will be further relaxed to help even Non-Resident Indians join the market.

“We have simplified KYC norms and permitted transactions in securities as soon as this process is completed. However, we are yet to establish an easy and secure KYC access for NRIs to facilitate their participation in the security market, which will be an urgent goal for us,” Pandey added.