SEBI 2026: Simpler rules, stronger tech oversight push

What SEBI is signalling to the market

The Securities and Exchange Board of India (SEBI) has said it will accelerate efforts to simplify and rationalise regulations, with an explicit focus on ease of doing business for all capital market participants. Chairman Tuhin Kanta Pandey outlined the direction during SEBI’s 38th foundation day event, which was attended by Finance Minister Nirmala Sitharaman. Alongside regulatory simplification, SEBI said it will continue investing in technology-led supervision. The regulator framed the approach as part of a broader goal of supporting market development so capital formation contributes to faster economic growth. Pandey also pointed to a parallel focus on strengthening governance and risk management capabilities. The messaging matters because it combines two priorities that often pull in different directions: faster innovation and stronger investor protection.

Foundation Day remarks: ease of doing business and collaboration

Pandey described the “way forward” as a collaborative effort that brings innovation for market development while ensuring safeguards keep pace. He said the regulator’s resolve is to simplify and rationalise rules so compliance becomes easier for intermediaries, issuers, and other stakeholders. At the same time, SEBI signalled that the growth of India’s markets increases the responsibility to balance innovation with investor protection and sustainable development. The regulator also highlighted an intent to strengthen governance and risk management frameworks, and to build capabilities rather than rely only on rule-making. This reflects an operational focus: improving how supervision works, not only what the rulebook says. Pandey also said SEBI is enhancing internal capabilities through technology, data analytics, and governance improvements to meet evolving market demands.

Technology-led supervision: from intent to internal tools

SEBI has positioned technology as central to regulation, surveillance, and policy-making as markets grow in scale and complexity. Pandey said SEBI is already deploying internally developed tools to strengthen oversight of market infrastructure institutions (MIIs). Tools cited include Sudarshan, a real-time surveillance system used to detect market irregularities, and LIDAR, an AI-driven analytics platform used for regulatory review and monitoring. Separately, another description in the provided material also refers to SEBI RADAR as an AI-based system that evaluates mutual fund advertising for compliance, and Sudarshan as an AI system that identifies unauthorised internet activity including social media fraud. The common theme across these initiatives is the use of AI and analytics for monitoring and detection, rather than manual checks alone. Pandey has also said SEBI has begun using AI-based surveillance to monitor market influencers and examine whether regulatory boundaries around investment advice are being breached.

Expert working group for a securities market technology roadmap

SEBI has constituted a high-level expert working group to develop a strategic technology roadmap for India’s securities market. Pandey said the group will prepare short-term and long-term recommendations to strengthen the technological architecture as the market deepens and integrates with global financial systems. The roadmap is expected to guide MIIs such as stock exchanges, clearing corporations, and depositories over the coming decade. SEBI said the group will take a holistic view of emerging technologies including AI and machine learning, distributed ledger technology, cloud computing, SupTech and RegTech solutions, tokenisation, and quantum-safe systems. The working group is chaired by Dr D B Phatak, Professor Emeritus at IIT Bombay, and includes chairpersons of MIIs’ Standing Committee on Technology (SCOT), senior officials from stock brokers and registrars and transfer agents, and technology experts. SEBI has linked the effort to resilience, future-readiness, and global competitiveness.

Investor protection meets outreach: AI calling campaign for SEBI Check

On 13 February 2026, SEBI rolled out a multilingual, AI-enabled public outreach initiative on a pilot basis to promote awareness of the ‘SEBI Check’ tool and validated UPI handles. The initiative is being carried out with Sarvam, which builds AI models tailored for Indian languages. The campaign focuses on ‘SEBI Check’, introduced on 1 October 2025, which lets investors verify the authenticity of payment details provided by SEBI-registered intermediaries before transferring funds. Investors can validate UPI IDs, scan QR codes, and cross-check bank account details linked to registered intermediaries. The stated purpose is to make safeguards more accessible across different linguistic groups, while addressing fraud risks linked to impersonation and fake payment details. The broader regulatory intent is clear: use technology not only for supervision but also for preventive investor education.

ESG ratings: SEBI’s working group to review ERP framework

On 18 February 2026, SEBI constituted a working group to review the regulatory framework governing ESG Rating Providers (ERPs). SEBI said the move follows feedback and representations from market participants and other stakeholders on the current framework. The working group includes issuers, investors, ESG rating users, domestic and global ERPs, ESG analysts, legal experts, and academics. Its mandate is to conduct a comprehensive review of existing regulations and recommend policy and regulatory changes to strengthen the ERP ecosystem. SEBI said the review will consider international regulatory developments and explore alignment with global best practices while keeping Indian market conditions in mind. The explicit objectives include improving transparency, reliability, and investor confidence in ESG ratings.

Recent reforms referenced in the Economic Survey and SEBI’s updates

The Economic Survey 2026 described SEBI initiatives aimed at strengthening market integrity, deepening capital markets, and enhancing investor protection. It cited measures such as mandating a new UPI address structure for SEBI-registered intermediaries collecting investor funds, effective 1 October 2025, complemented by the ‘SEBI Check’ verification mechanism. The Survey also noted a nationwide ‘SEBI vs SCAM’ awareness campaign launched in July 2025 in collaboration with market infrastructure institutions. It highlighted steps on accessibility, including SEBI mandating that digital platforms of regulated entities comply with the Rights of Persons with Disabilities Act, 2016. On market development, it cited a framework for ESG debt securities excluding green bonds, covering social, sustainability, and sustainability-linked bonds. In derivatives, it noted electricity derivatives beginning with monthly futures launched on the NSE in July 2025, and SEBI directions to standardise equity derivatives expiry days to Tuesday or Thursday.

Stock broker regulations overhaul and broader “ease of doing business” signals

SEBI also signalled an “ease of doing business” push through changes to intermediary regulations. The regulator notified a revamped framework that replaces the SEBI (Stock Brokers) Regulations, 1992 with the SEBI (Stock Brokers) Regulations, 2026. In another change cited in the Survey, SEBI allowed stock brokers to undertake securities market-related activities in GIFT-IFSC through a Separate Business Unit without requiring specific regulatory approval. The Survey also noted SEBI’s work to align guidelines for issuance and listing of securitised debt instruments with RBI norms on securitisation of standard assets, aimed at improving transparency and data dissemination to investors and credit rating agencies. Separately, the provided material referenced regulations effective 1 August 2025 requiring exchange approval for algorithmic trading strategies and unique Algo ID tagging.

Key initiatives and dates at a glance

Why this matters for markets and participants

SEBI’s current direction combines regulatory simplification with more tech-driven oversight, which can reduce compliance friction while tightening real-time monitoring. For investors, the focus on verified UPI handles, SEBI Check, and scam awareness campaigns is designed to reduce fraud risk in an increasingly digital payment environment. For intermediaries and listed companies, SEBI’s stated emphasis on governance and risk management suggests closer scrutiny of controls and disclosures as participation and product complexity rise. For MIIs, the proposed technology roadmap and the push toward SupTech and RegTech indicate a longer-term upgrade cycle in surveillance, resilience, and cyber preparedness. And for ESG-linked capital flows, the ERP review signals that SEBI is responding to market feedback on methodologies, comparability, and trust.

Conclusion

SEBI’s recent announcements and initiatives point to a regulatory agenda built around simpler rules, stronger governance, and deeper use of technology for both supervision and investor protection. The next milestones to watch include outputs from the expert technology roadmap working group and SEBI’s working group review of the ESG rating provider framework.