Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey detailed strategies to enhance India’s capital markets, including a review of short-selling and securities lending and borrowing (SLB) frameworks. The aim is to bolster market liquidity and connectivity between cash and derivatives markets. Additionally, SEBI plans to introduce bond index derivatives and provide guidelines on the responsible use of artificial intelligence (AI).
In collaboration with the Reserve Bank of India (RBI), SEBI is exploring the introduction of derivatives linked to bond indices to broaden investment and hedging options in the fixed-income sector. The regulator is also evaluating the potential introduction of longer-tenure futures and options contracts in the equity derivatives market. Furthermore, SEBI is considering extending early pay-in benefits to options contracts in commodity derivatives and gradually transitioning to physical settlement in specific agricultural commodities.
SEBI is reviewing the Innovators Growth Platform to enhance fundraising opportunities for companies in sectors like artificial intelligence, semiconductors, clean energy, biotechnology, advanced materials, and defense technology. Moreover, efforts are underway to establish a market-making framework for corporate bonds and deepen the municipal bond market. The tokenization of corporate bonds is being explored to modernize market infrastructure.
Regulations concerning municipal debt securities and portfolio management services are under scrutiny by SEBI. The regulator is also looking into potential changes to the delisting framework and Listing Obligations and Disclosure Requirements (LODR) regulations to ensure alignment with evolving market demands. SEBI aims to simplify market access for foreign investors by easing know-your-customer (KYC) requirements and adopting a risk-based approach to disclosure norms.
