SEBI Annual Report: Fraud Cases Fall, Soaring Market Review Peak in Insider Trading Cases – Key Takeaway

The Securities and Exchange Commission of India (SEBI) released its annual report for the fiscal year 2024-25 on Tuesday, August 12, detailing the dynamic regulatory progress, market developments and enhanced investor protection measures in the global economic environment.

“The fiscal year 2024-25 marks another key chapter in the development of the Indian securities market – a year characterized by sustained growth, major reforms and collective resilience, even in the face of global economic headwinds and geopolitical complexity. As we reflect on this journey, it can reaffirm our shared commitment to enable our input to promote competitors and to cultivate a growing, we will continue to develop competitiveness, we can compete, and we can enable us to compete. The journey is trust, transparency, teamwork and technology,” said Tuhin Kanta Pandey, Chairman of Sebi.

He added that India’s securities market has become a beacon of opportunity and innovation, powered by collaborations based on SEBI, market infrastructure institutions, market participants and an increasing number of authorized investors.

The report highlights SEBI’s proactive regulatory approach, focusing on capital formation, market acquisition, investor safeguards and corporate governance reforms. The key focus is to leverage technology to simplify compliance, democratize market access and strengthen risk management frameworks.

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SEBI enhances investors’ protection

“The growing retail investor participation continues to redefine the outline of our market. Indian investors are no longer limited to metropolitan centers, or to metropolitan centers, or to specific demographic profiles… Several measures have been taken over the year, which strengthens the policy approach of SEBI’s investor centers.”

Among the initiatives introduced, there is a mandatory direct payment for securities for clients DEMAT accounts, a framework to ensure retail investors participate in algorithmic trading, and consult with unregulated virtual trading platforms.

SEBI has also launched an enhanced complaint remediation system, including SEBI Complaints Redress System 2.0 and the Mitra platform, which provides investors with information on invalid and unclaimed portfolios of mutual funds. Other investor education efforts include virtual assistant SEVA and free online certification exams.

The report highlights SEBI’s commitment to streamlining its business, highlighting reforms such as the fast track rights issue process, digital introductions for foreign portfolio investors, and new asset classes such as new asset classes such as Professional Investment Funds (SIFS).

Technological advances remain the cornerstone of SEBI strategy, as data analytics are used to detect market misconduct, including internal trading and price manipulation. Indian stock market regulators have also taken steps to strengthen the bond market by lowering the minimum investment threshold and introducing liquidity options for retail investors.

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Key points of SEBI’s FY25 Annual Report:

• In fiscal 25, 106 fraud and unfair trade practices were reported
• Cases of fraud and unfair trade practices dropped from 160 to 106 (YOY)
• Pre-run survey reduced from 83 to 44 (Yoy)
• Price manipulation survey reduced from 77 to 61 (Yoy)
• Insider trading cases increased from 175 to 287 (YOY)
• 312 stock brokers surveyed
• Survey of stockbrokers increased from 146 (Yoy) to 312
• In FY25, 149 research analysts were studied
• Research analyst surveys increased from 15 to 149 (YOY)
• In fiscal 25, 207 investment consultants were investigated
• Survey of investment advisors increased from 21 to 207 (Yoy)
• In FY25, 24 mutual funds were studied
• Survey of mutual funds dropped from 25 to 24 (yes)
• Fees for equity and F&O brokers increased from about Rs 14 billion to Rs 190 crore (YOY)
• Fees for equity IPO prospectus increased from approximately Rs 100 crore to Rs 27 billion (YOY)

Looking ahead, SEBI aims to rationalize and simplify regulations, enhance investor education, and promote operational ease for foreign investors, while continuing to focus on market integrity and protection.

Pandy concluded: “As we enter 2025-26, Sebi’s regulatory outlook remains firm – Trust Funds and is guided by the determination to protect investors and driven by the goals that support India’s vision for 2047.”