Bond Tokenisation In Six To Nine Months, Says SEBI Chief

India's markets regulator signalled a fresh round of targeted reforms spanning bond market structures, broker regulations and foreign investor access, while outlining a clear timeline for a key market innovation, bond tokenisation, at the ICICI Securities India Investor Conference.

SEBI Chairman Tuhin Kanta Pandey said a previously indicated pilot on tokenisation is expected within a six-to-nine month window, giving the clearest forward signal yet on a product seen as critical to widening debt market participation.

On corporate bond market development, Pandey said the regulator is “working on a market-making framework to improve liquidity,” even as coordination with the Reserve Bank of India remains central to the next set of changes. He pointed to draft RBI guidelines on total return swaps and corporate bond derivatives issued earlier this year, adding that exchanges could roll out products once these are finalised.

The push on bonds comes against the backdrop of a still shallow secondary market, despite corporate bond issuances crossing Rs 9 lakh crore and a broader expansion in market depth. Market capitalisation has risen to about 128% of GDP, while mutual fund assets have surged past Rs 80 lakh crore, numbers Pandey used to underscore the system's scale, even as liquidity gaps persist in fixed income.

Separately, Pandey confirmed that SEBI is reviewing variable net worth requirements for stock brokers, a move that could recalibrate capital thresholds and operational flexibility for intermediaries. He declined to comment on the Reserve Bank's stance on 100% collateral requirements for bank guarantees, saying the outcome will emerge through SEBI's consultation process.

“We are currently reviewing the framework for variable net worth requirements for stock brokers,” he said, indicating that the proposal is still under examination rather than close to finalisation.

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Another reform track under evaluation is pricing efficiency in primary markets. SEBI is examining improvements in price discovery, including through pre-call auction mechanisms for IPOs and relisted securities, an area that has drawn scrutiny amid volatile listing-day outcomes.

Pandey also pointed to easing compliance for research analysts as a priority, alongside a more practical framework for intraday borrowing in mutual funds, both moves aimed at reducing friction without weakening oversight.

On foreign capital flows, he said the regulator is working to further compress onboarding timelines for foreign portfolio investors through coordination with custodians and the central bank. This builds on the “Swagat” single-window framework and a series of easing measures already implemented for government securities investment.

The forward pipeline of reforms comes even as SEBI highlights progress on reducing capital-raising frictions. IPO timelines have been cut, rights issues accelerated, and listing norms eased to allow large issuers to access markets without immediate dilution. “We have significantly improved the efficiency of capital raising,” Pandey said.

In the post-speech interaction, however, the SEBI chief remained guarded on enforcement matters. Asked about an interim order involving Rajesh Exports and whether there had been a mischaracterisation of revenue versus profits, Pandey declined to engage, reiterating that the regulator does not comment on ongoing quasi-judicial proceedings.

The broader framing of the speech was that India's capital markets are scaling rapidly but require continuous calibration to remain investable. Equity issuance crossed Rs 4.5 lakh crore in FY26, with 366 IPOs raising about Rs 1.9 lakh crore, while investor participation has climbed to roughly 145 million.

Pandey's messaging suggests SEBI's next phase will be less about sweeping structural shifts and more about targeted fixes, improving bond market liquidity, refining broker norms, tightening price discovery and making entry easier for foreign capital.

At the core, the emphasis remains on trust and usability. “Stock brokers are the face of the market for millions of investors,” he said, tying intermediary accountability to the regulator's broader push to deepen participation.

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