Union Finance Minister Nirmala Sitharaman on Saturday called for a more “sophisticated and anticipatory” regulatory approach for India’s capital markets, urging the Securities and Exchange Board of India to deepen investor trust while keeping pace with rapid technological and structural changes.
Speaking at SEBI’s 38th Foundation Day, Sitharaman also pushed for simpler, standardised and digital KYC processes across financial sectors, and urged SEBI to take the lead in creating a seamless investor experience. She also called for deeper corporate bond markets, greater retail participation, and a stronger push for municipal bonds to finance urban infrastructure.
Pointing out that Indian markets have evolved into one of the world’s most advanced ecosystems, she warned that rising scale and complexity demand stronger surveillance, cybersecurity preparedness and investor protection frameworks.
“The lesson that we must draw from history is not that regulation should become more restrictive, but that it should become more sophisticated and anticipatory rather than merely reactive” she said, emphasising that trust and integrity remain the “invisible infrastructure” of financial markets.
Highlighting SEBI’s achievements, the minister pointed to India’s early adoption of the T+1 settlement cycle, pioneering use of ASBA (application supported by blocked amount) for IPOs and enabling UPI-based applications, which have significantly broadened retail participation.
In FY26, primary markets saw a record 366 IPOs raising about ₹1.9 lakh crore, attesting to strong capital formation momentum, she said. SEBI’s success rate at legal forums - over 90 per cent in the Supreme Court, 73 per cent at the Securities Appellate Tribunal, and 92 per cent at Civil Courts and NCLT - demonstrated the institutional strength of its legal architecture, she said.
However, the FM cautioned that increased retail participation must be matched with financial awareness. “Participation without understanding can create vulnerability,” Sitharaman said, adding that investor protection should evolve from a defensive to a developmental function.
She also flagged emerging risks from unregistered “fin-fluencers,” deepfake-driven fraud and AI-enabled cyberattacks, calling for stricter enforcement and greater public awareness. She asked SEBI to expand tools such as ‘SEBI Check’ and strengthen real-time monitoring systems.
Emphasising global integration, she said Indian regulation must remain in dialogue with international counterparts to address cross-border risks and attract global capital.
“India needs not just bigger markets, but better markets,” Sitharaman said, adding a deeper bond market must also include a serious push for Municipal Bonds. Pointing out that urban infrastructure cannot be financed sustainably through budgetary resources alone, she advised that SEBI should consider working with Urban Local Bodies, State Governments, and the Ministry of Housing and Urban Affairs to further improve the municipal bond framework.
She added that the journey towards Viksit Bharat entailed “extraordinary investment” in infrastructure, manufacturing, energy transition, urban transformation, innovation and human capital and this “cannot be financed by the public balance sheet or banks alone.”
Published on April 25, 2026