SEBI Cracks Down on Market Intermediaries: A New Era of Regulation
The Securities and Exchange Board of India (SEBI) has significantly ramped up its surveillance and enforcement efforts in fiscal 2025, carrying out 312 inspections of stock brokers, more than double the 146 conducted in the previous year. This move is part of SEBI’s broader push to tighten oversight of advisory practices, curb biased or misleading market research, and ensure strict compliance with fair disclosure norms.
Increased Oversight of Investment Advisers and Research Analysts
Inspections of investment advisers surged to 207 from 21, and research analysts jumped to 149 from just 15 in Fiscal 2024, according to SEBI’s annual report for 2024-25. This sharp rise in oversight is a clear indication of SEBI’s commitment to protecting Indian investors from unscrupulous practices.
For instance, investor protection is a top priority for SEBI, and the regulator has been working tirelessly to ensure that market intermediaries adhere to strict guidelines and regulations. The increased oversight of investment advisers and research analysts is a significant step in this direction.
Mutual Funds and Registrar and Transfer Agents: A Steady Approach
In contrast, inspections of mutual funds and their registrar and transfer agents remained largely steady at 24 compared to 25 a year earlier. This suggests that SEBI is taking a more nuanced approach to regulating these entities, recognizing that they play a critical role in the Indian financial ecosystem.
Offsite Inspection Alerts and the SEBI E-Drive
During the year, SEBI also developed offsite inspection alerts for monitoring stock brokers, depository participants, investment advisers, and RTAs as part of its continuous supervision framework. Further, work is underway on the SEBI e-drive — a cloud-based platform for sharing inspection data and alerts with brokers and DPs.
This technology-driven approach will enable SEBI to respond quickly and effectively to any potential threats to market integrity, ensuring that Indian investors are protected from fraudulent activities.
Enforcement Actions: A Significant Increase
On the enforcement front, the regulator initiated 400 cases for investigation into violations of securities laws in fiscal 2025 compared to 342 in the previous year, and completed 301 cases against 197 earlier. Insider trading remained the most prominent focus, with investigations rising from 175 to 287 and completions from 130 to 192.
For more information on insider trading and its implications for Indian investors, please visit our website.
Market Manipulation and Price Rigging: A Decline in New Cases
Market manipulation and price rigging cases saw a marginal decline in new cases but a sharp jump in closures. This suggests that SEBI is taking a proactive approach to addressing these issues, recognizing the potential harm they can cause to Indian investors.
Conclusion: A New Era of Regulation
SEBI’s intensified surveillance and enforcement efforts are a clear indication of the regulator’s commitment to protecting Indian investors. As the Indian stock market continues to evolve, it is essential for investors to stay informed about the latest developments and regulations. By doing so, they can make informed investment decisions and navigate the complexities of the market with confidence.
For more information on investing in India, please visit our website.
