SEBI's Ananth Narayan Assures Consultative Approach To Derivatives, Focus On Deepening Cash Markets

Ananth Narayan, whole-time member of SEBI, said that the regulatory framework for the derivatives segment will be “analytical and consultative”, and also confirmed market regulator's current view to deepen the cash markets.

Speaking at a FICCI event, he said SEBI is also considering ways to improve the tenor and maturity profile of derivative products so that they better support sustained capital formation.

He further said that the traded volumes in the equity cash markets have grown rapidly at over 25% compounded annual growth rate in the past five years to more than Rs 1 lakh crore per day, more needs to be done, particularly given the sharper rise in short-term derivative volumes.

Narayan said SEBI is working to make it easier for trusted global funds to invest in India through its proposed 'Swagat' framework — Single Window Automatic and Generalised Access for Trusted Foreign Investors. This could cover as much as 70% of FPI assets under management, offering easier registration, lighter compliance, and wider market access.

Turning to investor protection, he said education and awareness remain national priorities. The market watchdog is working on a large-scale, demography-sensitive outreach program tailored by age, region, and language, supported by the Panchayati Raj ecosystem for grassroots awareness.

"We must collectively focus on increasing investor protection, including through spreading education and risk awareness, and focus on improving overall ease of doing business," he said.

Narayan also spoke about strengthening the accredited investor regime. He noted that although India has had an AI framework since 2021, uptake has been limited. SEBI has eased the process and is proposing further steps, including allowing AIF managers to conduct due diligence and creating an accredited investor-only AIF regime with lighter compliance requirements.

He urged industry participants to engage constructively with SEBI in minimising both “type 1 errors” such as uninformed investing, governance failures, or flawed product design, and “type 2 errors” such as excessive regulation that hampers innovation.