We want innovation to flourish, but not at cost of "market integrity": SEBI Chairman

Addressing Outlook Money's 40After40 event, the SEBI chief underscored that trust remains the cornerstone of India's rapidly expanding capital markets, cautioning that rising retail participation must be supported by stronger investor protection, transparency, and financial education.  

New Delhi: Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Friday reiterated SEBI's philosophy of "optimum regulation," balancing innovation with market integrity and investor protection. He warned that cyber fraud is likely to increase with digital adoption and urged investors to remain vigilant, particularly safeguarding senior citizens.   "We are guided by the philosophy of optimum regulation. We want the innovation and market development to flourish, but not at the cost of market integrity or your protection. Cyber fraud will continue to increase as digital channels become more influential. We will continue our relentless efforts to combat  these  frauds through technology,  tightening  processes, and spreading awareness," Pandey said.   Addressing Outlook Money's 40After40 event, the SEBI chief underscored that trust remains the cornerstone of India's rapidly expanding capital markets, cautioning that rising retail participation must be supported by stronger investor protection, transparency, and financial education.   Pandey noted that India's investor base has grown multi-fold over the past five years to around 14 crore investors, driven by technology-led onboarding and wider market access. However, he highlighted a persistent gap between awareness and informed participation, making many investors vulnerable to mis-selling, scams, and poorly understood risks.   Pandey emphasised that financial security is a lifelong journey involving wealth creation, inflation protection, and steady post-retirement income. He said capital markets offer long-term diversification opportunities across equities, mutual funds, corporate bonds, REITs, InvITs, and commodities, but warned investors against relying on unsolicited offers or "guaranteed return" messages circulating on social media.   Detailing SEBI's recent investor-centric initiatives, the Chairman said the regulator is tackling cyber fraud and scams "head-on." He highlighted the SEBI Check facility, which allows investors to verify whether payment handles belong to SEBI-registered intermediaries in under 30 seconds. SEBI has also mandated a new UPI handle structure for registered intermediaries, featuring a unique "@valid" identifier.   To counter risks from cloned trading apps, Pandey said stock exchanges have been directed to maintain a white-list of broker mobile applications, accessible via exchange websites and SEBI's investor portal. He advised investors to download apps only through verified links.   Pandey added that securities purchased by investors are now credited directly to their demat accounts, while funds are held with clearing corporations, ensuring tighter safeguards. Investors can also freeze trading accounts instantly upon detecting suspicious activity.   Pandey said SEBI is strengthening disclosures through standardised and verifiable IPO documents, including an abridged prospectus at the draft offer stage. Mutual fund expense disclosures have also been made more transparent.   He announced that PaRRVA (Past Risk and Return Verification Agency) will enable investors to check verified performance claims of registered intermediaries, protecting them from misleading assertions by unregistered entities. The Unified Investor App will offer a consolidated view of holdings, open positions, and margin details, alongside e-voting capabilities.   Pandey highlighted the role of Aadhaar-based e-KYC in enabling instant online verification and reducing paperwork. He pointed to the Basic Services Demat Account (BSDA) option for cost-effective investing, with minimal maintenance charges for holdings up to Rs 10 lakh.   To deepen bond market participation, SEBI has reduced the minimum investment threshold in privately placed corporate bonds to Rs 10,000 and permitted Online Bond Platform Providers to facilitate retail transactions. He added that mechanisms like MITRA, a searchable database for unclaimed mutual fund folios, and DigiLocker integration aim to minimise unclaimed assets.   Pandey said the revamped SCORES 2.0 grievance redressal system has shortened timelines and introduced two levels of review. The SMART ODR platform, operational since August 2023, has resolved around 8,900 disputes worth Rs 670 crore, leveraging technology to deliver speed and transparency outside courtrooms.