MUMBAI: Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said on Saturday that the markets watchdog is easing regulatory processes to help non-resident Indians (NRIs) invest in Indian equity markets.
The regulator is working on simplifying procedures so that NRIs do not have to travel back to India to comply with know-your-customer (KYC) requirements.
“We are yet to establish an easy and secure KYC access system for NRIs to facilitate their participation in the securities market. This will be an urgent goal for us,” Pandey said at an event organised by the Bombay Stock Exchange Brokers’ Forum here on Saturday.
SEBI is in touch with the Reserve Bank of India (RBI) and the Unique Identification Authority of India (UIDAI) to create a system where NRIs can complete their KYC verification through video calls instead of having to travel back home, he added.
It may be noted that there are over 3.5 crore NRIs globally, and India is the world’s largest recipient of remittances, having received $135 billion in FY25.
Pandey said that, having already decided in September to create a single window for trusted foreign portfolio investors (FPIs) with lighter compliance requirements, SEBI’s “immediate goal” is to make the FPI registration process simple and fast by making it fully portal-based.
“We are already consulting our stakeholders to implement it. We would like to be among the best in the world in terms of facilitating registration,” he said.
Pandey described the initiative as a “process issue” rather than one arising from risks, and said that SEBI, RBI and the Income Tax Department would need to work together to enable digitised registration.
Addressing the broker fraternity, Pandey said SEBI will complete rewriting broker regulations by December.
To strengthen cybersecurity, SEBI will issue guidelines on maintaining an “air gap” in consultation with market infrastructure institutions, he said.
He added that market infrastructure institutions are being stress-tested with live disaster recovery drills and that SEBI has implemented a redundancy model for clearing corporations, allowing operations to continue seamlessly if one clearing corporation goes down.
“We are also examining the implementation of a safety net in case of an outage at a depository participant, similar to what exists for stockbrokers,” Pandey said.
On the surveillance front, SEBI is shifting from reactive supervision to predictive oversight, he noted, adding that the data warehouse system has been revamped to develop new role-based alerts to identify pump-and-dump patterns and detect fraudulent trades in bulk deals.
Algorithmic and high-frequency trading have seen significant growth in recent years and now account for a substantial share of volumes in both equity and derivatives markets, Pandey said.
“We will constantly update our regulatory framework in this regard to ensure a fair, transparent and resilient market,” he added.
Noting that cash equity volumes are hovering around ₹1 trillion daily, Pandey said there is a need for further deepening of the market. SEBI will review the stock lending and borrowing mechanism (SLBM) framework in line with risk management principles to achieve this objective, he added.
On the short-term derivatives market, Pandey said SEBI will be “thoughtful and consultative” while suggesting measures to improve market depth, keeping in mind investor suitability and risk awareness.
Urging stakeholders to be more innovative, he said a resilient market requires diverse instruments for capital raising and risk management.
Amid lukewarm investor response to the ‘Chhota SIP’ initiative, Pandey said the product has significant potential and assured that SEBI will remove barriers to its growth.
Commodity derivatives, he added, have the potential to benefit the country, and SEBI will help resolve key issues related to taxation, delivery and GST in this segment.
