When key risks of a company are buried in dense and vaguely-framed documents, over-disclosures can be as problematic as non-disclosures, the Securities and Exchange Board of India’s (Sebi) Whole-Time Member Amarjeet Singh said. “The gap (in information asymmetry) today is not about what is hidden, but also about what is effectively not heard.”
Speaking at the third annual conference of the National Stock Exchange (NSE) and Indian Institute of Management (IIM) Kozhikode on Monday, Singh said that the challenge is less about availability of information and more about credibility and comprehension. Differences in access to information are easier to address.
Recent surge in retail participation
The recent surge in retail participation in options trading illustrates how cognitive biases including overconfidence, fear of missing out, optimism, can play out in decision making, Singh said. Despite tighter norms and widespread losses made by retail participants in the derivatives space, such players continue to invest in this segment.
Indian individuals, directly and through mutual funds, now own close to 19% of the market, the highest level in 22 years and also more than the FPI (foreign portfolio investment) holdings. However, promoter holdings declined to 50% in September 2025 from a peak of nearly 58% in 2009. “In this context, the whole information asymmetry issues gain further significance.”
Risk with financial influencers
With finfluencers, or financial influencers, a key risk was promotion of products or undisclosed compensation. “We are one of the few regulators around the world who has made significant progress in this space,” the WTM added.
Sebi has been taking regulatory actions on finfluencers for providing investment advice under the guise of financial education and for using live trading data which is currently prohibited for educational purposes.