SEBI chairperson Madhabi Puri Buch on Thursday highlighted the role of technology in transforming the capital market ecosystem.
“AI is the hero of a large number of initiatives that we are in the process of deploying and is hugely democratising the ability to deploy technology within an organisation,” Buch said in a pre-recorded address at the symposium on India’s Securities Market Tech Stack (SMART 2025).
“A system that is efficient but exclusive does not serve the nation. We wish for our market ecosystem to be inclusive and to bring as many citizens of the country into the fold and help in wealth creation,” Buch said.
Within SEBI, there have been numerous examples of transformation using AI, she said. SEBI has embraced technology for introducing T+1/T+0 settlement, reducing timelines to raise capital through IPOs from T+6 to T+3, the pledge-repledge mechanism in the secondary market, online KYC, Mutual Fund Central and ASBA in the secondary market. Technology has helped reduce the timelines for registration of intermediaries, time taken to issue observations on offer documents filed for IPOs, online dispute resolution for investors and so on. These measures have helped ease of doing business for market participants and retail investors alike.
“SEBI’s endeavour is to use technology in making the Indian securities market more efficient and transparent. At the same time, conscious of the abuse or misuse of technology, SEBI has put in effective cyber security measures not only for market participants but also for its internal working,” the regulator said in a note.
“There are ways in which we have tried to bring down risks and improve efficiency in the ecosystem. Technology, however, comes with challenges. Any glitch or malfunction can have serious consequences for the entire ecosystem,” SEBI Whole-time Member Ananth Narayan said.
He said the holdings of each individual trader in India are held between two depositories. This makes transferring securities easier. “The possibility for us to implement quicker settlement is that much easier as the payment system is fantastic and on the securities side our technology lends itself to these kind of instant transfers,” said Narayan.
According to him, the amount of cash equivalent collateral in the system is about $50 billion. A lot of it is lying with the intermediaries. That represents float income, inefficiencies and risks. “One way to reduce the risks is to crunch settlement times,” he said.
Whole-time member Ashwani Bhatia said SEBI’s regulatory approach had been to incrementally support technology-driven processes, making them accessible and sustainable.