SEBI Chairman Tuhin Kanta Pandey has announced sweeping reforms to make India’s capital markets more accessible, efficient, and secure in a major stride
toward boosting foreign investor participation. A key focus area is simplifying Know Your Customer (KYC) norms for Non-Resident Indians (NRIs), allowing them to complete KYC procedures remotely, without physically coming to India. Speaking at an event hosted by the BSE Brokers’ Forum on Saturday, October 11, Pandey emphasised that enabling easier access for global Indian investors is now a top regulatory priority. “We are yet to establish an easy and secure KYC access for NRIs to facilitate their participation in the securities market. This will be an urgent goal for us,” said Pandey. Digital Infrastructure SEBI is collaborating with the Reserve Bank of India (RBI) and the UIDAI to create a digital infrastructure that allows NRIs to fulfil KYC requirements from abroad. With over 3.5 crore Indians living overseas and remittances of $135 billion flowing into the country in FY25, easing entry barriers could unlock significant capital into Indian markets. Streamlined FPI Registration Via Single Window In another significant announcement, SEBI is working to simplify the foreign portfolio investor (FPI) registration process by introducing a digital, single-window portal. “We are already consulting stakeholders to implement it... we would like to be among the best in the world in terms of facilitating registration,” Pandey stated. The new process aims to be fast, secure, and low-risk, with SEBI joining hands with the Income Tax Department and the RBI to digitise FPI compliance and approval mechanisms. These reforms come at a time when retail investor activity is cooling, as seen in the slowdown of SIP inflows, making foreign capital a critical component of market liquidity. Tech-Driven Surveillance, Cybersecurity Overhaul SEBI is also taking decisive steps to fortify India’s market infrastructure. Pandey highlighted enhanced cybersecurity frameworks, including “air gap” guidelines and live disaster recovery drills being implemented in partnership with market infrastructure institutions (MIIs). “MIIs are being stress-tested with live disaster recovery drills,” he confirmed. On the surveillance front, SEBI is adopting predictive analytics to detect market manipulation, such as pump-and-dump schemes, particularly in bulk deals and algorithmic trading environments. “We are developing role-based alerts to identify pump-and-dump patterns and fraudulent trades,” said Pandey. Broader Reforms On The Horizon SEBI is also reviewing the Stock Lending and Borrowing Mechanism (SLBM) to enhance risk management and is planningconsultations on policies governing short-term derivatives. Pandey further indicated SEBI’s interest in diversifying financial instruments, boosting ‘Chhota SIPs’ (small-value SIPs), and addressing tax and GST-related roadblocks in the commodity derivatives space. “These reforms reflect SEBI’s commitment to creating a fair, transparent, and resilient market,” he concluded.
