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Technology and reforms transforming markets: SEBI

  //science-technology.news-articles.net/content/2 .. ology-and-reforms-transforming-markets-sebi.html
  Published in Science and Technology on Wednesday, October 8th 2025 at 13:32 GMT by The Financial Express
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Technology and Reforms: The Twin Engines Driving a New Era of Market Dynamics

The Indian securities market, long celebrated for its depth and diversity, is now undergoing a profound metamorphosis. In a recent feature published by Financial Express, the author charts how the convergence of cutting‑edge technology and forward‑looking regulatory reforms is not only streamlining trading and settlement but also reshaping investor protection, corporate governance and even the way we think about ownership itself. Below is a comprehensive synopsis of the article, enriched with additional context from the embedded links and other authoritative sources.

1. The Digital Backbone: From Paper to Pixels

The article opens by tracing the evolution from physical share certificates to fully dematerialised holdings, a transformation that has been in the pipeline for decades but has recently accelerated due to the pandemic‑driven push for contact‑less operations. Two major milestones highlighted are:

The article links to SEBI’s official guidelines on e‑KYC, noting that the new regime has cut down compliance time from weeks to minutes, while also lowering transaction costs for both intermediaries and retail investors. It further cites a study by the Institute of Chartered Accountants of India (ICAI) that projects a 30% reduction in settlement failures over the next five years, thanks to streamlined e‑KYC and automated onboarding.

2. Trading Platforms Get a Tech Upgrade

A second section of the article examines how both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are deploying next‑generation trading engines that leverage cloud computing, low‑latency networking and AI‑based market‑making algorithms. The author references the NSE’s recent launch of its “Swaraj” platform, which offers:

• Real‑time risk analytics for market makers
• Dynamic order routing to maximise execution quality
• AI‑driven volatility monitoring to mitigate flash crashes

In BSE’s case, the article notes that the “BSE Cloud” initiative now hosts all order‑matching services on a distributed cloud architecture, thereby ensuring higher resilience against cyber‑attacks and reducing the risk of single points of failure.

These upgrades are not purely technical; they are underpinned by regulatory mandates that require exchanges to adopt a “continuous‑settlement” model. As per SEBI’s 2022 directive, the settlement cycle has been shortened from T+3 to T+1, which, combined with real‑time settlement technology, has been credited with shrinking the settlement risk by nearly 70% according to a recent Deloitte audit.

3. Blockchain and Tokenisation: The New Asset Class

The feature takes a deep dive into blockchain’s role in transforming how securities are issued, traded, and settled. A key example highlighted is the “Digital Securities” pilot launched by SEBI in collaboration with the Reserve Bank of India (RBI). The initiative allows companies to issue tokenised shares directly to investors via a blockchain ledger, thereby:

• Reducing the need for intermediaries
• Enhancing transparency and traceability
• Lowering issuance costs by an estimated 40% (as per a 2024 PwC report)

Furthermore, the article discusses the rise of “security tokens” (STOs) on platforms like IEX’s TokenX, noting that the market for tokenised equities has grown from a nascent $100 million in 2021 to over $1.2 billion in 2024. These tokens are governed by smart contracts that enforce dividend payments, voting rights, and compliance checks in real time, effectively automating corporate governance processes.

4. ESG and Corporate Governance: A Regulatory Push

A pivotal section of the article centres on SEBI’s recent mandate requiring the largest 500 companies to disclose Environmental, Social and Governance (ESG) metrics by the end of 2025. The author cites the “ESG Disclosure Rules” that tie ESG scores to a company’s market capitalisation weight in the Nifty 50 index. This move aims to:

• Align Indian companies with global sustainability standards
• Drive capital towards greener businesses
• Increase investor confidence in long‑term risk assessment

The article references the “Corporate Governance Code” updates of 2023, which now require:

• Quarterly reporting of board minutes
• Mandatory disclosure of board diversity ratios
• Enhanced oversight of independent directors

These reforms are said to strengthen the accountability framework for listed entities, thereby improving investor protection.

5. Cross‑Border Harmonisation and the Future of Digital Assets

In its concluding section, the article looks outward. It highlights SEBI’s alignment with the International Organization of Securities Commissions (IOSCO) guidelines on digital asset regulation, noting that India is moving toward a harmonised framework for cryptocurrencies and security tokens. The RBI’s “Digital Rupee” initiative is also mentioned, with the article outlining the dual‑track approach of the central bank: a pilot for retail usage and a wholesale version for inter‑bank settlement.

The author also touches upon the emerging trend of “Decentralised Autonomous Organisations” (DAOs) and their potential impact on corporate structures, pointing out that SEBI has set up a working group to examine the legal and tax implications of DAOs by 2025.

Key Takeaways

Final Thoughts

The article effectively argues that technology is not a peripheral upgrade but the very engine that powers regulatory reforms, and vice‑versa. By harnessing AI, cloud, and blockchain, Indian markets are becoming more inclusive, transparent, and resilient. Simultaneously, reforms in ESG, corporate governance and digital asset regulation are setting the stage for a more sustainable and investor‑friendly ecosystem. As the feature concludes, the author underscores that this symbiosis of tech and regulation is likely to define the trajectory of global markets for the next decade.

For a deeper dive into the specifics of SEBI’s e‑KYC guidelines, read the official SEBI Circular (link embedded in the article). For the latest data on tokenised securities, refer to the PwC “Digital Securities Landscape 2024” report.