Quality Research, Not Just Tech And Capital Flows Will Shape Future Of Securities Markets, Says Sebi Chief Tuhin Kanta Pandey

Securities and Exchange Board of India (Sebi) chairman Tuhin Kanta Pandey on February 12, 2026 said that the future of India’s securities markets will be shaped by the quality of our analytical capabilities and the foresight of our policy choices, and not just by technology and capital flows alone. He said that research must keep pace with the changing nature of India’s capital markets and called for greater cooperation between academia, regulators and industry. He was speaking at the Sixth Annual International Research Conference on Securities Market (2025–26).

“As we look ahead, the research agenda must evolve with the markets. We need India-specific behavioural finance research. We need deeper study of technology risks and governance frameworks. We need interdisciplinary research that brings together different areas, such as finance, law, data science and behavioural economics. We encourage quality research and serious policy impact evaluation. Researchers can play a vital role by partnering with regulators and industry on pilot studies, sandbox evaluations and ex-post assessments of regulatory interventions,” he said.

India’s Securities Market Grew from Scale to Sophistication

Pandey said that India’s securities markets have transitioned “from scale to sophistication,” and the growth has been both significant and broad-based. India’s total market capitalisation has surged from about Rs 100 trillion in FY15 to over Rs 470 trillion at present. The corporate bond market has also deepened, expanding at a steady pace of around 12 per cent compounded annualised growth rate (CAGR) since FY15 to reach nearly Rs 58 trillion by the end of 2025. Investor participation has also widened, as the number of unique investors has increased to around 140 million from just 38 million in March 2019, he said.

“The mutual fund industry has mirrored this democratisation and the industry’s assets under management (AUM) grew from roughly Rs 12 trillion in FY16 to Rs 81 trillion as of January 2026,” he added.

Pandey said the alternative investment fund (AIF) space has also scaled up meaningfully, with investments increasing from about Rs 0.20 trillion in FY16 to more than Rs 6.50 trillion by December 2025. “These numbers show a structural shift,” he said, adding that securities markets are now playing a central role in financing enterprises, supporting micro, small and medium enterprises (MSMEs) and start-ups, and channelising household savings into productive investments.

He further said that at a time when global finance is becoming more fragmented and risk-sensitive, India’s market evolution is being closely tracked, placing greater responsibility on regulators and institutions to build markets that are deep, trusted and resilient.

As Markets Grow in Size, They Also Grow in Complexity

Pandey said that as markets expand, they inevitably become more complex. Now, technology is at the heart of modern securities market infrastructure, trading, clearing, settlement and surveillance functions are now almost entirely digital, he added.

“Artificial intelligence and advanced analytics are already strengthening surveillance systems, helping detect misconduct and fraud, and offering sharper insights into investor behaviour. But these technological gains come with new vulnerabilities. Algorithmic trading can create self-reinforcing feedback loops, AI systems may lack transparency, and automated processes can magnify errors at great speed. These risks are no longer theoretical but increasingly visible in digital-first markets,” he said.

As such, it is important to make rigorous research essential, particularly on market microstructure in technology-led environments, and be cautious of the risks arising from AI-driven systems, he added.

Understanding how technology reshapes incentives, behaviour and outcomes must accompany innovation, he said, adding that without adequate study and safeguards, speed can easily outpace safety.

Data as a Public Good

He further said that data has become the backbone of innovation in financial markets, and the scale as well as diversity of market data has grown rapidly alongside the expansion of India’s securities ecosystem. Sebi has also taken steps to make publicly available market data easier to access and use, he added.

“To further strengthen the research environment, exchanges, clearing corporations and depositories have been directed to put in place formal data-sharing policies aimed at facilitating academic and policy work. The objective is to encourage high-quality research within the securities market ecosystem and enable more evidence-based decision-making,” he said.

He further said that Sebi increasingly views market data as a “public good” when governed responsibly, as it can help in shaping policy, supervision and risk assessment.

Pandey also urged scholars to undertake more empirical and policy-relevant studies, adding that data should not merely be observed, but rigorously analysed and questioned to inform better regulatory and market outcomes.

The event was organised by Sebi and National Institute of Securities Markets (NISM) in collaboration with IIM Mumbai, Maharashtra National Law University, Mumbai, and the NSE.