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Sebi to cut routine inspections of market intermediaries by two-thirds
Sebi said it will conduct about one-third of the inspections it carried out in the prior fiscal year, moving to quarterly risk-based shortlists and joint checks for firms with multiple registrations.
India’s markets regulator, Sebi, said it will reduce routine inspections of stock market intermediaries starting this fiscal year, shifting to a risk based supervisory model that prioritizes firms flagged for potential violations.
According to the regulator, the overhaul is designed to improve regulatory efficiency and lower duplication with inspections already performed by stock exchanges and depositories. Under the new approach, Sebi plans to conduct only about one-third of the inspections it carried out in the previous fiscal year.
Sebi said it will stop repetitive comprehensive inspections of well run entities, including qualified stock brokers, unless they repeatedly show up on risk parameters, accumulate high risk scores, or trigger multiple exchange alerts. The regulator also said it expanded its risk indicator set, with added emphasis on recent exchange alerts, investor complaints, and even social media inputs.
The framework also changes how firms are selected for inspection, with intermediaries shortlisted every quarter rather than through a blanket annual process. Sebi added that it will conduct joint inspections for entities holding multiple intermediary registrations wherever feasible, and it will increasingly use market intelligence for cases involving technical glitches, cyber incidents, and issues related to authorized persons.