- Direct plans will be default on AMC digital platforms from Nov 1
- SEBI plans to revisit frameworks for main-board IPOs, SME IPOs, and Innovators Growth Platform
- SEBI's four priorities are simpler regulation, deeper markets, governance, technology for smarter regulation
From Nov. 1, direct plans will be the default option on asset management companies' digital platforms, Securities and Exchange Board of India Chairman Tuhin Kanta Pandey said on Wednesday. Investors who choose regular plans will have to be told about their higher expense ratio.
Speaking at NDTV Profit Ignite: Diwali Edition in Mumbai, Pandey also said the regulator will revisit the framework for main-board initial public offerings and follow-on public offers. It is also reviewing the SME IPO framework and the Innovators Growth Platform, particularly for new-age companies, to improve access to public capital for growing businesses.
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“Public capital brings public responsibility,” Pandey said. He added that SEBI has proposed stronger monitoring of how issue proceeds are used and is reviewing the framework for debenture trustees.
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Four Priorities
Pandey said SEBI's agenda rests on four priorities.
The first is simpler regulation and easier access. SEBI is reviewing listing and disclosure obligations. It is examining net settlement for mutual fund transactions and aligning REIT and InvIT listing timelines with those for equity. For foreign portfolio investors, it is working with the Reserve Bank of India to harmonise SWIFT-based certification of KYC documents for FPI bank accounts. It is also examining longer KYC review cycles for eligible FPIs. ESG rating providers will move from prescriptive rules to a principles-based framework.
The second area of focus is deeper markets and wider financing choices. Besides the SME and IPO reviews, SEBI is speaking directly with corporate bond issuers about the hurdles they face. It is also consulting on fixed-income channel partners to take regulated online bond platforms beyond major cities.
Governance and investor protection is third area of focus, as this covers the direct-plan default, monitoring of issue proceeds and the debenture-trustee review.
The fourth, Pandey listed, is technology for smarter regulation. SEBI's Radar tool already checks mutual fund and distributor advertisements, and it will be extended to other intermediaries. The regulator is building an in-house system for AI-driven analysis of compliance reports from portfolio managers and AMCs. It is also piloting an AI tool to monitor disclosures by debenture trustees, stock exchanges, depositories and credit rating agencies, which is meant to flag early signs of corporate debt defaults.
SEBI is also exploring a domestically governed AI model for the securities market and is studying its technical feasibility, governance and data requirements. “Artificial intelligence is changing financial services, but an algorithm cannot take responsibility,” Pandey said. He added that institutions using AI must stay accountable for outcomes and investor data.
Access Without Understanding
Pandey cited SEBI's investor survey. It found that 63% of households knew of at least one securities market product, but only about 9.5% participated. Among investors, just 36% had moderate or high market knowledge.
“Easy access does not guarantee understanding,” he said. “Investing must be a choice made with open eyes, knowing what you buy, what it costs, and what you risk.”
SEBI's Project Jagruk awareness campaign runs in English, Hindi and 11 regional languages. Since its October 5 launch, it has drawn more than 25 crore impressions and over 18 crore views on social media, he said. The regulator has escalated more than 2.2 lakh instances of misleading online content to social media platforms for takedown. Its in-house AI tool, Sudarshan, accounted for over 40% of those escalations. In recent orders on unauthorised investment schemes and advisory activities, SEBI has directed entities to refund money collected from investors.
Faster Fundraising
On access to capital, Pandey said companies can now list within three working days of an IPO closing. He said more than 140 alternative investment fund schemes have been processed in three months under the GARUDA framework. Under that framework, AIFs launching regular schemes can go ahead 10 working days after filing their placement memorandum with SEBI through a registered merchant banker, unless the regulator advises otherwise. freepressjournal
About 585 FPIs have used the Swagat-FI single-window route, accounting for roughly 15% of FPI assets under custody, he said.
Pandey put equity market capitalisation at around Rs 470 lakh crore, outstanding corporate bonds at roughly Rs 61 lakh crore and mutual fund assets at about Rs 83 lakh crore. REITs and InvITs together manage more than Rs 10 lakh crore, and India has over 15 crore unique securities market investors. Over the past decade, companies have raised about Rs 10 lakh crore a year through equity and debt, he said.
Scale is one measure, Pandey said, but the real test is how well markets finance the economy. “Our responsibility is to make markets more accessible, efficient, and resilient while protecting investors and preserving market integrity,” he said.
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