FM Urges Sebi to Simplify KYC, Shift to Anticipatory Regulation

Finance Minister Nirmala Sitharaman on Saturday called on the Securities and Exchange Board of India (Sebi) to lead efforts in simplifying and standardising know-your-customer (KYC) processes across the financial system, stressing the need for a seamless, secure, and portable framework. Speaking at Sebi’s 38th foundation day event, she emphasized that citizens should not be required to repeat verification across multiple platforms and urged coordinated action with the Financial Stability and Development Council (FSDC) and other regulators.

Highlighting the future of financial oversight, Sitharaman said regulation must transition “from reactive to anticipatory,” focusing on emerging risks such as AI-driven market abuse, cross-border fraud, and cybersecurity threats. She warned that a single large-scale cyberattack on critical market infrastructure could have systemic consequences, calling for continuous upgrades to Sebi’s cyber resilience framework. The minister also advocated for principles-based regulation supported by structured public consultations rather than overly prescriptive rules.

On market development, Sitharaman pushed for reforms to deepen India’s corporate bond market, including expanding retail participation, improving liquidity, and standardising issuance frameworks. She underscored the need for stronger investor protection through enhanced enforcement, awareness campaigns, and faster grievance redressal, while also urging global regulatory coordination to boost investor confidence. Framing capital markets as central to India’s growth, she said robust, well-regulated markets are essential to finance infrastructure, energy transition, and innovation ambitions.

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