Finance Minister Nirmala Sitharaman on Saturday urged the Securities and Exchange Board of India (Sebi) and all regulated market institutions to remain ‘exceptionally vigilant’ against emerging cyber threats. She warned that even a single successful cyberattack on a major exchange, depository, or clearing corporation could destabilise markets at a national scale.
Speaking at the Sebi’s 38th Foundation Day, Sitharaman also raised concerns over the rapid spread of fake investment videos, cloned apps, and deepfake financial promotions on social media. Many such frauds, she noted, impersonate public figures and trusted institutions to mislead retail investors.
The minister said the regulator views the unlicensed financial advisory space with ‘utmost seriousness’, pointing to actions taken against unregulated financial influencers, or finfluencers. “We should not tolerate monetisation of uninformed retail investor trust for personal enrichment,” she said.
Policing the Finfluencer
Launching Sebi’s nationwide investor awareness initiative, Mission Jagrook, Sitharaman emphasised that public education must be as critical as regulation in an era of technology-driven fraud. She added that awareness campaigns should be disseminated across major digital platforms and in regional languages to ensure wider reach beyond urban, English-speaking investors.
Her remarks come at a time when millions of first-time investors are entering equities, mutual funds, and digital investment platforms through online channels.
Sitharaman also advocated a soft-touch regulatory approach supported by public consultation, rather than an overly prescriptive rulebook. She noted that Sebi’s use of consultation papers, stakeholder engagement, and iterative policymaking reflects regulatory maturity.
“I urge Sebi to pursue this consultative path even further. Let market participants see themselves as partners in regulation, not as subjects of it,” she said.
Regulatory Maturity
The FM underscored the need for a seamless, secure, and portable know your customer (KYC) framework across the financial sector. She said the issue has been discussed at the Financial Stability and Development Council, with a push for common KYC norms and greater digitisation.
“It is the shared responsibility of all stakeholders to ensure that no citizen has to repeat the same verification journey across multiple financial products and platforms,” she said, calling for urgent action.
Sitharaman also asked Sebi to continue efforts to standardise debt issuance documentation and improve secondary market liquidity. She stressed the need to strengthen credit enhancement mechanisms to expand access to bond markets beyond top-rated issuers.
Calling for a ‘serious push’ towards municipal bonds, she said urban infrastructure cannot rely solely on budgetary resources. She urged closer coordination between Sebi, urban local bodies, state governments, and the Ministry of Housing and Urban Affairs to deepen this market.
The FM also highlighted Sebi’s legal robustness, evidenced by its high success rate in litigation: over 90% in the Supreme Court, 73% at the Securities Appellate Tribunal, and 92% at civil courts and the National Company Law Tribunal.