Securities and Exchange Board of India Announces Committee Dedicated to Fintech

Securities and Exchange Board of India (SEBI) announced this week the launch of a new committee dedicated to financial and regulatory technologies. This news comes less than six months after the organization revealed plans for the committee.  During Internet and Mobile Association of India (IAMAI)’s 11th Digital India Summit in New Delhi, SEBI’s U.K. Sinha, reportedly stated in February:

“To harness technology to enable persons in small towns with small amounts to invest in a retirement fund, we are going to form an advisory committee on fintech that will be led by some very strong business leaders from the industry. I hope this committee will help us spread the market and mobilize domestic household savings for the growth of the country by way of providing risk capital as well as debt investments.”

SEBI revealed in a new statement:

Application of technology in financial markets is changing the way financial markets traditionally have functioned. Technology is affecting financial markets through various channels be it technology driven financial market platforms for fund raising (such as peer to peer lending, crowd funding), online access to investment products (e-KYC, online mart investment products, Robo-advisory, and online portfolio management), post-trade market for securities (through new database technologies such as blockchain and other distributed ledger technology), product and process innovation (such as algorithmic trading, algorithmic driven synthetic investment products, virtual currencies, digital payment gateways), etc. With technology driven revolution in the financial markets, regulators are faced with the challenges as well as opportunities to evolve their functioning more effectively through adoption of new technology solutions.

SEBI also explained that the committee would examine, deliberate, and advise on the ongoing basis of the following:

  • Recent and medium term trends (within next 5 years) in FinTech developments in securities market worldwide
  • Opportunities and challenges from new FinTech solutions and its impact on Indian Securities Market.
  • Fintech solutions for further widening and deepening of Indian securities market. 
  • Approach and framework for regulatory sandbox in Indian market conditions to facilitate adoption of FinTech and promote financial innovations
  • Preparing Indian securities market and regulatory framework to adopt to new fintech solutions while promoting market integrity, market development, consumer protection and managing change, business models and market disruptions 
  • Assessing technological solutions for regulatory functions of SEBI viz. information management and data mining, risk management including cyber security, intermediary supervision, consumer protection, etc. through application of new technological solutions like application of distributed ledger technology, big data, data analytics, artificial intelligence, machine Learning etc.
  • Technology capacity building by Indian securities market in general and SEBI in particular.
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