SEBI Chief Urges Financial Intermediaries to Maintain Clean, Auditable Books

Mumbai, November 4:
Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey has called on financial intermediaries to uphold thest stanhe higdards of integrity, transparency, and operational resilience as India’s capital markets grow rapidly. Speaking at the Morningstar Investment Conference in Mumbai, Pandey said the real differentiator for market institutions will not be how quickly they comply with regulations but how deeply they internalise them.

Compliance Should Be a Foundation, Not a Ceiling

“The strongest and most respected firms will be those that see compliance not as a ceiling, but as a foundation,” said Pandey. He emphasised that institutions must build upon this foundation with a culture of integrity, resilience, and transparency that continuously earns investor trust.

He added that the ultimate measure of success lies in how effectively intermediaries resolve advances, ensure accurate settlements, and maintain transparent disclosures. “Institutions must make such transparency a habit,” he said.

Also Read: Bharti Airtel Shares Rise After Strong Q2 FY26 Results

Investor Trust and Market Integrity Must Go Beyond Slogans

Pandey highlighted the critical role of financial intermediaries in maintaining investor trust and market integrity. He warned that if investor confidence is compromised, market liquidity could suffer.

“Investor protection and market integrity are often used as regulatory slogans, but they must translate into real-life practice,” he said. “The intermediary sits at the junction of these two tracks and must act decisively to deliver on both promises.”

Rising Digital Risks and the Need for Oversight

The SEBI chief noted that intermediaries are now operating in an environment shaped by digital acceleration, global market linkages, and evolving investor expectations.

He identified cybersecurity as a major concern, urging firms to safeguard sensitive client data and critical infrastructure. “Third-party and outsourcing risks have grown with reliance on technology vendors and service providers, requiring stronger oversight and due diligence,” Pandey said.

Clean and Auditable Books Essential for Trust

Pandey stressed that today’s investors demand fairness and transparency in every transaction.
“Investors expect not just access to the market but access on fair terms — with clarity in transactions, execution, and payouts,” he said. “Intermediaries must ensure that their own books and blind flows are clean, separate, and auditable.”

He also noted that algorithmic and high-frequency trading, while improving market efficiency, brings new vulnerabilities. “These technologies demand robust risk controls, real-time monitoring, and strict compliance safeguards,” he said.

Operational Resilience and Grievance Redressal

Pandey underscored that operational resilience is now critical as markets face volatility and digital transformation. “Investors expect speed and personalisation, but they also expect reliability,” he said.

He called for timely grievance redressal as a key measure of investor trust, adding that firms must foster a culture of vigilance and adaptability to maintain market confidence.

SEBI’s Ongoing Reforms and Regulatory Updates

Pandey outlined SEBI’s recent steps to simplify compliance and modernise frameworks. These include enabling intermediaries to file compliance reports through a single exchange and introducing UPI Verify to streamline investor transactions.

He also said SEBI is reviewing the Stock Broker Regulations, 1992, to make them more relevant. A key proposal allows individuals who bought physical securities before April 2019 but couldn’t transfer them earlier to now complete those transfers — a move expected to benefit long-term investors.

Pandey noted that a circular on this proposal may be released by December.

Leadership Through Integrity

Concluding his address, the SEBI Chairman said:
“When institutions lead with integrity, markets follow. And when markets follow, investors gain confidence.”

Click here to explore:
Gift Nifty
Advanced Stock Screener
Options Screener