Fresh adjudication proceedings initiated by the Securities and Exchange Board of India (Sebi) fell to 135 in FY26 from 204 a year earlier, according to Mint's analysis of Sebi data. The number of adjudication orders passed against registered intermediaries declined to 88 in FY26 from 116. This represents the lowest level since 2016, when proceedings stood at 249. The decline comes as listed companies and market intermediaries have strengthened compliance, surveillance and internal controls, while Sebi appears to be directing more of its enforcement capacity towards violations that pose greater risk to investors and market integrity. As per Tushar Kumar, Advocate at the Supreme Court of India, there appears to be a discernible case for viewing the decline against the backdrop of a more risk-based and impact-oriented enforcement philosophy, noting that regulatory resources are necessarily finite and their deployment against substantial market manipulation may yield considerably greater regulatory value.
"Listed entities and intermediaries have strengthened compliance teams, insider-trading controls, structured digital databases, disclosure committees, surveillance systems and board-level oversight," said Alay Razvi, managing partner at Accord Juris. Exchanges and market institutions now use automated tools to detect unusual trading, disclosure delays and client-level irregularities. These systems may prevent smaller breaches or help entities correct issues before formal adjudication begins. Brokers accounted for the largest share of adjudication orders at 41, followed by merchant bankers at 14 and investment advisers at 9. Yogesh Chande, partner at Shardul Amarchand Mangaldas, emphasized that better compliance and stronger internal controls, backed by real-time monitoring, can help market participants avoid violations, while Sebi's increased surveillance and monitoring may act as a deterrent.
Violations involving fraudulent and unfair trade practices continued to account for the largest number of adjudication orders at 233 in FY26, marginally lower than 239 a year earlier. The regulator completed 202 insider-trading investigations in FY26, up from 192 a year earlier. It also initiated 72 investigations into suspected price and volume manipulation, compared with 61 in FY25. Front-running investigations rose to 49 from 44. Kumar noted that the fall in adjudication proceedings is more likely attributable to a confluence of factors, including greater sophistication of compliance architecture within regulated entities, enhanced surveillance at the level of stock exchanges and market infrastructure institutions, and a more calibrated deployment of Sebi's enforcement machinery. The regulator passed a total of 62 final orders in FY26, down from 89 in FY25, with interim orders falling to 15 against 26.
The fall in formal orders does not necessarily indicate a broader decline in regulatory oversight. Sebi strengthened its surveillance of market infrastructure institutions (MIIs) and intermediaries. The regulator conducted IT inspections of 18 intermediaries in FY26, compared with inspections of 11 MIIs in the previous year. An adjudication order and a final order differ based on the severity of the violation, nature of action and the authority passing the order. While an adjudication order is passed by an adjudicating officer to determine whether a monetary penalty is necessary for misconduct, a final order is usually passed by a whole-time member of Sebi and focuses on regulatory or remedial directions, such as restraining an entity from accessing the securities market, disgorging the wrongful gains and so on. Kumar emphasized that the decline in formal orders ought not to be construed as any diminution of regulatory oversight or enforcement, as the regulator continues to maintain its surveillance and monitoring capabilities across the market infrastructure.
