New Delhi, October 12, 2025: The Securities and Exchange Board of India (SEBI) is developing advanced technological tools to detect pump-and-dump schemes and fraudulent trades in bulk deals at a faster pace. SEBI Chairman Tuhin Kanta Pandey shared this during an event organized by the BSE Brokers Forum (BBF), emphasizing that the move aims to strengthen market transparency and investor protection.
Pandey explained, “From a surveillance perspective, we are shifting from reactive monitoring to predictive oversight. Our data warehouse system has been upgraded, and new rule-based alerts have been developed to detect pump-and-dump patterns and manipulative trades more efficiently.”
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He added that pump-and-dump schemes typically follow identifiable patterns, and the new data-driven technology will allow timely identification and alerting of such manipulative behavior, enhancing market integrity.
Safety Net for Depository Participants
SEBI is also working on a safety net mechanism for depository participants (DPs). Pandey stated, “In case of a DP outage, the issue can be addressed at the depository level, similar to arrangements already in place for stock brokers. This is crucial to safeguard investors’ interests.”
Strengthening Cash and Derivatives Markets
The Chairman highlighted that the cash equities market, the foundation of capital formation, has nearly doubled its daily traded volumes to over Rs 1 lakh crore in three years. However, he noted the need to further deepen the market and review the Security Lending and Borrowing Mechanism (SLBM) to ensure effective risk management.
Regarding weekly expiries in derivatives, Pandey said that several regulatory measures have already been implemented based on detailed data analysis. “We will continue a consultative and thoughtful approach to propose further steps that enhance market efficiency while maintaining investor protection and risk awareness,” he added.
For NRI investors, SEBI is working on enabling remote KYC. Secure digital KYC trials are underway in collaboration with UIDAI and RBI, which will allow NRIs to complete the process without visiting India.
SEBI is also simplifying Foreign Portfolio Investor (FPI) registration, Pandey noted. “FPI registration is a window to the global market. If the process itself is cumbersome, the window cannot shine. Our focus is on removing operational barriers rather than taking additional risk,” he said.
Encouraging Innovation and Investor Choice
Pandey urged the market to co-create innovative products and remove barriers to small SIPs. SEBI will focus on providing investors with more diversified investment options aligned with their individual risk profiles.
Boosting Commodity Markets
The Chairman stressed the untapped potential of commodity derivatives, noting issues like taxation, delivery mechanisms across states, and GST concerns. SEBI has established working groups whose recommendations will guide the market’s further activation and growth.
Stock Broker Regulations and Investor Protection
SEBI is working to simplify and rationalize stock broker regulations to reduce costs and compliance burdens while maintaining robust risk management. Pandey also emphasized the ongoing focus on cyber fraud prevention and protection against misleading advice from unregistered finfluencers, with continuous collaboration with market institutions and intermediaries.
Commitment to Sustainable and Secure Growth
Pandey concluded, “We can all take pride in the market we have built. Our collective goal now is to ensure that this growth remains sustainable and secure. We must build not just successful businesses but resilient institutions.”
In an era of festive investing and rapid market expansion, one message is clear —Vigilant investors and strong regulatory frameworks are the brightest lamps guiding India’s financial markets.
