Mumbai, India, October 24 (ANI) — The Securities and Exchange Board of India (SEBI) is exploring a graded compliance framework for stockbrokers, Chairman Tuhin Kanta Pandey announced Saturday.
Addressing market intermediaries at the 16th ANMI International Capital Market Convention in Mumbai, Pandey said the proposed framework would tailor regulatory requirements to market realities.
“For stockbrokers, we are exploring graded compliance. It would reflect your scale, your client exposure, and your reliance on technology,” Pandey said, emphasizing the need to balance supervision with operational risks.
Highlighting the need to deepen India’s debt market, the SEBI chairman said the regulator was focused on improving liquidity and market infrastructure beyond equities.
“A market-making framework is being developed to lift secondary trading in corporate bonds,” he said.
Pandey added that technological advances would drive the next phase of market infrastructure, announcing upcoming structural innovations for corporate debt instruments.
“In the next phase of Demat 2.0, tokenized corporate bonds will trade in the secondary market, bringing better liquidity, lower settlement risk, and faster access to funds,” he said.
Outlining SEBI’s approach to technological advancements, Pandey said regulation must encourage innovation while mitigating systemic risks.
“We are exploring an AI sandbox where new tools can be tested safely. While innovators gain regulatory certainty, we gain the right safeguards,” he said.
The SEBI chairman cautioned market intermediaries about cybersecurity threats and operational disruptions, urging firms to prioritize resilience rather than treating compliance as a routine obligation.
“So please treat cybersecurity as a business priority, not an IT expense. Test your systems. Plan for failure,” Pandey warned.
Summarizing the regulator’s direction, Pandey outlined SEBI’s broader agenda for market development.
“Our roadmap has four parts: simpler rules, deeper markets, responsible technology, and wider access,” he said.
He also highlighted ongoing reforms targeting depository participants to simplify compliance while strengthening risk controls.
“We are reworking the rules for depository participants for simpler compliance and stronger defenses against fraud,” Pandey said.
Additionally, the regulator is reviewing core trading mechanisms to ensure robust price discovery and liquidity across financial instruments.
“We are reviewing short selling and securities lending and borrowing to improve liquidity and price discovery,” Pandey concluded. (ANI)
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