Tuhin Kanta Pandey highlights artificial intelligence, tighter monitoring of IPO proceeds, mutual fund transparency and easier foreign investor access at NDTV Profit Ignite 2026
New Delhi | 4 November 2026
The Securities and Exchange Board of India (SEBI) is preparing to strengthen its market surveillance and regulatory oversight through greater use of artificial intelligence (AI), enhanced scrutiny of initial public offerings (IPOs) and improved monitoring of funds raised from investors. SEBI Chairman Tuhin Kanta Pandey outlined these priorities at the NDTV Profit Ignite: Diwali Edition event held in Mumbai on 29 October 2026.
His address highlighted the regulator’s broader approach towards building a securities market that is technologically advanced, transparent, accessible and accountable. The priorities extend beyond equity-market surveillance to mutual fund investor protection, foreign portfolio investor (FPI) facilitation, corporate bond development and the review of IPO regulations.
The message is significant for India’s financial markets, where rising retail participation, increasing fundraising activity and the growing use of digital investment platforms have created new opportunities as well as regulatory challenges.
Artificial Intelligence to strengthen market surveillance
One of the key areas highlighted by the SEBI Chairman was the expanding role of artificial intelligence in regulatory supervision.
SEBI is working to extend its existing AI-based monitoring capabilities to cover a wider range of market intermediaries. Its existing Radar tool, which checks advertisements issued by mutual funds and distributors for regulatory compliance, is expected to be extended to advertisements from other regulated entities.
The regulator is also developing an in-house system that will use AI to analyse compliance reports submitted by portfolio managers and asset management companies. Such technology could help identify unusual patterns, potential violations and areas requiring closer regulatory examination.
Another AI-based initiative is being piloted to monitor disclosures made by debenture trustees, stock exchanges, depositories and credit rating agencies. The objective is to identify early warning signals that may indicate potential stress or defaults in the corporate debt market.
Pandey also indicated that SEBI is exploring a domestically governed AI model specifically designed for the securities market. The initiative reflects the importance of data confidentiality, security and regulatory control when applying advanced technology to financial supervision.
However, AI will support regulatory processes rather than replace institutional responsibility. Regulated entities will remain accountable for their decisions, compliance outcomes and investor data.
Stronger monitoring of IPO proceeds
SEBI is also looking to strengthen accountability in the primary market, particularly in relation to the utilisation of funds raised through public issues.
The Chairman indicated that the regulator is working on a framework under which third-party monitoring agencies would examine whether companies deploy IPO proceeds for the purposes disclosed in their offer documents.
The proposed approach is intended to strengthen transparency and ensure that money raised from public investors is used for the stated business objectives.
This issue has gained importance as companies increasingly access capital markets to fund expansion, repay borrowings, acquire businesses and meet other corporate requirements.
SEBI had earlier issued a consultation paper on strengthening the monitoring of IPO proceeds. The proposals included expanding the scope of monitoring agencies beyond the existing threshold applicable to fresh issues.
If implemented, stronger monitoring could improve accountability among issuers and provide investors with greater confidence regarding the use of their capital.
Review of mainboard and SME IPO frameworks
Pandey also indicated that SEBI would revisit the regulatory framework governing mainboard IPOs and follow-on public offers.
The review is expected to cover listing requirements, disclosure obligations and the broader framework for companies accessing public markets.
The regulator is separately examining the SME IPO framework and the Innovators Growth Platform, particularly in relation to new-age and emerging businesses.
The objective is to provide suitable fundraising opportunities to companies at different stages of development while maintaining appropriate investor-protection safeguards.
The SME segment has become an important source of capital for smaller businesses. However, ensuring genuine business activity, transparent disclosures and responsible use of public funds remains essential for the credibility of this market.
Direct mutual fund plans to become the default option
Another important announcement concerns the distribution and cost structure of mutual fund investments.
SEBI Chairman Tuhin Kanta Pandey stated that direct mutual fund plans would become the default option on asset management companies’ digital platforms from 1 November 2026. Investors selecting regular plans would need to be informed about their higher expense ratios.
Direct plans generally have lower expense ratios because they do not include distributor commissions. Regular plans involve distribution services and therefore generally carry higher expenses.
The move is aimed at improving transparency and helping investors understand the cost implications of their investment choices.
The initiative also reinforces SEBI’s broader objective of making investment products easier to understand and ensuring that investors receive relevant information before making financial decisions.
Easier access for foreign portfolio investors
SEBI is continuing its efforts to simplify the investment process for foreign portfolio investors.
The Chairman highlighted the SWAGAT-FI framework, which provides a simplified, single-window route for eligible foreign investors. Around 585 FPIs had used this route, accounting for approximately 15% of FPI assets under custody, according to the remarks reported at the event.
SEBI is also working with the Reserve Bank of India to harmonise SWIFT-based certification of Know Your Customer documents for FPI bank accounts.
In addition, the regulator is examining longer KYC review cycles for eligible foreign investors. The objective is to reduce repetitive compliance requirements while retaining safeguards and the obligation to report material changes.
These measures are intended to make India’s securities market more accessible to international capital without compromising regulatory oversight.
Investor protection remains central to regulatory policy
Technology and regulatory reforms are being accompanied by stronger investor-awareness and enforcement initiatives.
Pandey highlighted SEBI’s efforts to address misleading online investment content, including the escalation of more than 2.2 lakh instances to social media platforms for takedown. The regulator’s in-house AI tool, Sudarshan, accounted for more than 40% of these escalations, according to the reported remarks.
The Chairman also referred to investor-awareness initiatives such as Project Jagruk, which aims to improve financial understanding through communication in multiple Indian languages.
The underlying concern is that greater digital access to investment products does not necessarily translate into better investor understanding. Investors must be able to assess costs, risks and the nature of the products they purchase.
A broader push towards deeper capital markets
Beyond equity markets and mutual funds, SEBI is also looking to develop India’s corporate bond market and expand financing choices for businesses.
The regulator is engaging with corporate bond issuers to understand the challenges they face in raising funds. It is also consulting on fixed-income channel partners to improve the distribution of regulated online bond products beyond major cities.
The review of the debenture trustee framework is another part of the effort to strengthen oversight and investor protection in debt markets.
Technology, transparency and accountability will shape the next phase
The priorities outlined by SEBI Chairman Tuhin Kanta Pandey at NDTV Profit Ignite reflect the changing demands on India’s market regulator.
Artificial intelligence could help SEBI analyse larger volumes of regulatory information, identify unusual patterns and detect potential risks earlier. Stronger monitoring of IPO proceeds could improve corporate accountability, while reforms in mutual fund distribution and FPI onboarding could make investment participation more transparent and accessible.
The challenge will be to ensure that technology-led supervision is supported by reliable data, appropriate governance and clear accountability.
As India’s capital markets expand, the effectiveness of regulation will depend not only on the size of the market but also on the quality of disclosures, the integrity of market participants and the confidence of investors.
SEBI’s emerging regulatory agenda signals a greater emphasis on combining technology with stronger governance to support the next phase of India’s financial-market development.
