SEBI Chairman Tuhin Kanta Pandey has issued a stern warning against any attempts to manipulate the newly introduced Closing Auction Session (CAS) framework, stating that such actions will be dealt with immediately. Speaking at the 23rd FICCI Capital Markets Conference 2026 on August 19, Pandey emphasized that "If there is manipulation in CAS, we will act strongly against it and act immediately." He specifically warned that "If anybody feels that they will manipulate CAS for defaming the new system, they are in danger." According to The Economic Times, Pandey noted that "We can catch hold of manipulation in CAS relatively easily. CAS is for transparency." The regulator's ability to detect manipulation under CAS is significantly higher than under the older volume weighted average price (VWAP) system it replaces. Participation in the CAS framework is increasing, with specific adoption by mutual funds and proprietary traders, as reported by The Economic Times.
The Securities and Exchange Board of India (SEBI) will soon issue comprehensive guidelines for responsible AI and machine learning use in India's capital markets. According to The Economic Times, **SEBI Chairman Tuhin Kanta Pandey announced at the 23rd FICCI Capital Markets Conference 2026 on August 19 that the framework will require human oversight, data controls and "Kill Switch" mechanisms. The proposed rules will take a tiered approach with clear accountability and governance controls for AI and machine learning applications. As Pandey emphasized, "The question is not whether markets will use AI, the question is how we use it responsibly while preserving trust." The framework addresses both opportunities and risks, with AI expected to strengthen market surveillance, risk assessment, fraud detection and investor servicing while creating risks around opacity, bias, cybersecurity, data protection and accountability. Every SEBI-regulated entity will remain fully responsible for any AI or machine-learning tool it uses, whether developed internally or procured from a third party, with responsibility extending to the privacy, security and integrity of investor data.
India's capital markets have experienced unprecedented expansion, creating the need for enhanced AI governance frameworks. According to The Economic Times, equity issuances crossed ₹4.5 trillion in FY26, with around ₹1.9 trillion raised through 366 initial public offerings. The growth extends beyond equity markets, with corporate bond issuances exceeding ₹9 trillion in FY26, while ₹2.7 trillion had already been raised in the first four months of the current financial year. By the end of July 2026, ₹260 billion had been raised through 79 IPOs, with another ₹2 trillion potentially to be raised going forward. Alternative Investment Fund (AIF) investments had risen to around ₹7 lakh crore by end-July 2026, while market capitalisation stood at around 132 per cent of GDP. The market expansion has resulted in around 149 million unique investors, with household participation increasing through mutual fund assets of around ₹86 trillion and systematic investment plan (SIP) assets accounting for more than one-fifth of industry assets. Pandey noted this represents "financialisation in action, as households are increasingly becoming investors in India's growth story."
SEBI has launched two dedicated cybersecurity portals to enhance market resilience against cyber threats, complementing the upcoming AI guidelines framework. The **Incident Reporting Portal is designed to make cybersecurity incident reporting "more structured, timely and actionable" while the Cyber Suraksha Portal will serve as a central hub for information sharing. The Incident Reporting Portal is aligned with the Financial Stability Board's (FSB) Format for Incident Reporting Exchange (FIRE), which is intended to bring greater uniformity to incident reporting and reduce friction in cross-border incident reporting. The Cyber Suraksha Portal will act as a central hub for sharing cybersecurity knowledge, vulnerability warnings, policy measures, and incident insights across the securities market ecosystem. As per ANI, the SEBI Incident Reporting Portal is intended to make cyber-incident reporting more structured, timely and actionable, while aligning with the CIFI format to facilitate greater uniformity and reduce friction in cross-border incident reporting.
SEBI has implemented comprehensive measures to protect retail investors from excessive speculation in derivatives markets. According to The Economic Times, data released by the Finance Ministry earlier this month revealed individual investors' losses in derivative trades reduced to ₹91,685 crore in FY26 from ₹1.1 lakh crore in FY25. Earlier studies by SEBI had revealed that over 90% of trades by retail investors led to losses, with reports of extreme steps like suicides being committed due to market reverses. SEBI acted with a slew of measures aimed at lowering speculation in the market and protecting investors. On Thursday, SEBI will release more granular and updated data on the performance of retail investors' bets in the futures and options market, as reported by The Economic Times.
SEBI is exploring new investment channels and regulatory frameworks to support India's evolving capital markets. According to The Economic Times, the regulator is considering wider investment channels, including allowing client funds under the proposed Portfolio Managers framework to invest in foreign securities and a framework to support global fund management activity from India. The regulator is also reviewing the securities lending and borrowing and short-selling frameworks to deepen cash markets, while proposals for debt markets include ESG debt and exploration of corporate bond tokenisation. Pandey emphasized that India would need capital for infrastructure, technology, advanced manufacturing, energy transition, data centres and new-age enterprises, particularly in AI. The approach will focus on "simplify where we can", calibrate regulation to risk and sophistication, enable capital formation and keep safeguards strong. He urged industry bodies to identify high-potential enterprises in sectors such as manufacturing, energy, IT and logistics that are ready to access the capital markets and educate them on the benefits of listing.
