Economic Survey 2026 Lauds Sebi For Strengthening Regulation, Streamlining Markets

The Economic Survey 2025–26, tabled in Parliament on January 29 by Union Minister of Finance Nirmala Sitharaman, acknowledged Securities Exchange Board of India’s (Sebi) efforts to strengthen regulatory discipline, streamline market operations, and enhance investor protection.

“Collectively, these measures underscore SEBI’s commitment to fostering a transparent, resilient, and inclusive capital market ecosystem in India, while strengthening market confidence through improved verification, disclosure, accessibility, and risk surveillance across key segments of the securities market,” said the Survey.

The Economic Survey, prepared every year by the Department of Economic Affairs under the Ministry of Finance, is released a day before the presentation of the Union Budget. It reviews economic trends and flags key policy and regulatory developments from the previous year.

The Survey highlighted the following key measures taken by Sebi:

For Investor Protection:

Sebi prioritised investor safety in FY26, particularly in fund transfers. The regulator mandated a new UPI address structure for all registered intermediaries collecting money from investors, effective October 1, 2025, to ensure verified payment channels and reduce the risk of fraud.

The market watchdog supplemented this move by introducing ‘SEBI Check’, which allows investors to verify payment details before transferring funds. In July 2025, it also launched a nationwide awareness campaign, ‘SEBI vs SCAM’, in collaboration with market infrastructure institutions to help investors identify red flags and adopt safer digital practices.

To expand investor education beyond cities, Sebi partnered with the Ministry of Panchayati Raj to train block-level Panchayat representatives in financial literacy. It also directed regulated entities to make their digital platforms compliant with the Rights of Persons with Disabilities Act, 2016, to improve accessibility in the securities market.

For the Development of the Bond Market:

The Survey further highlighted Sebi’s renewed push to deepen India’s bond market. The regulator introduced a new framework for ESG debt securities, excluding green bonds, covering social, sustainability and sustainability-linked bonds to bring greater regulatory clarity to the segment.

Sebi also organised outreach programmes on municipal bonds, bringing issuers, investors and regulators together to address concerns and improve participation. To support infrastructure financing through municipal bonds, it advised credit rating agencies to extend expected-loss-based rating scales to these instruments.

Sebi further aligned its norms for issuing and listing securitised debt instruments with Reserve Bank of India’s (RBI) guidelines on securitisation of standard assets, easing compliance and improving information flow to investors and rating agencies.

Fine-Tuning Regulations:

During the year, Sebi took several steps to reduce regulatory friction. It removed the requirement for stock brokers to seek specific approval to undertake securities market activities in GIFT-IFSC through a Separate Business Unit.

The regulator tightened governance norms for listed companies by mandating disclosures of minimum information to audit committees and shareholders while approving related-party transactions. It also streamlined sponsor contribution requirements for private InvITs converting into public InvITs.

To improve onboarding flexibility, Sebi allowed registered intermediaries to use National Payments Corporation of India’s (NPCI) e-KYC Setu System as an alternative to Aadhaar-based e-KYC.

New Product Launches:

Sebi announced the creation of a Past Risk and Return Verification Agency (PaRRVA) to independently verify performance claims made by investment advisers, research analysts and algorithmic trading providers. The agency is yet to become operational.

In the derivatives segment, Sebi facilitated the launch of electricity derivatives, beginning with monthly futures on the National Stock Exchange (NSE) in July 2025. Sebi and the Central Electricity Regulatory Commission (CERC) jointly designed the contracts and risk management framework to ensure these products function primarily as hedging tools.

Tighter Norms for Equity Derivatives:

To address volatility in equity derivatives, Sebi directed exchanges to standardise expiry days by choosing either Tuesday or Thursday. The move aimed to curb sharp swings on expiry days.

Sebi also revised the methodology for calculating open interest using delta-adjusted, future-equivalent positions at the portfolio level. It recalibrated market-wide and entity-level position limits, tightened eligibility norms for derivatives on non-benchmark indices and mandated intraday monitoring of position limits.