Market manipulation will not be tolerated, says SEBI Chairman Tuhin Kanta Pandey

SEBI's Strong Message Against Market Misconduct

In a decisive message to market participants, newly appointed Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Friday emphasized that market manipulation of any form will not be tolerated under his leadership. Speaking at a regulatory summit in Mumbai, Pandey underlined the importance of integrity, transparency, and trust in capital markets, warning that SEBI is actively stepping up surveillance and enforcement measures.

“We are committed to ensuring fair play in India’s capital markets,” Pandey said. “Manipulative practices that distort market efficiency or harm investor interests will be met with firm regulatory action.”

New Era of Enforcement and Accountability

Pandey, who took over the chairmanship in 2024, has been vocal about bolstering SEBI’s role in safeguarding investor interests amid a rapidly evolving financial ecosystem. The watchdog is now leveraging advanced data analytics, AI-powered surveillance, and inter-agency collaboration to detect irregular patterns in trades.

“Regulatory technology is a game-changer,” Pandey noted. “Our market surveillance systems are becoming sharper and faster. Manipulators will find it increasingly difficult to escape scrutiny.”

This marks a shift from a reactive to a proactive regulatory stance, where real-time alerts and behavioral models are guiding SEBI's investigative units.

Recent Instances Prompt Crackdown

The remarks follow several recent episodes where market irregularities rattled investor sentiment. In March 2025, SEBI imposed penalties on two brokerage firms for coordinated pump-and-dump operations in small-cap stocks. Earlier this year, questions were raised around social media-driven stock tips and WhatsApp group collusion, prompting SEBI to issue advisory guidelines on financial influencers.

"These incidents have highlighted systemic vulnerabilities, especially in the small and mid-cap segments," said Anjali Sharma, Capital Markets Analyst at Equinomics Research. “SEBI’s message is clear: enforcement is no longer just post-facto; it’s becoming predictive.”

Investor Confidence is Paramount

Tuhin Kanta Pandey also reinforced SEBI’s role as a guardian of retail investors, particularly at a time when India is witnessing a surge in first-time stock market participants. According to NSE data, the number of Demat accounts crossed 160 million in May 2025, a significant leap from under 100 million in 2022.

“Increased retail participation is a positive development. But it also increases our responsibility to prevent mis-selling, fake tips, and frauds,” Pandey added.

The regulator has also directed intermediaries to enhance risk disclosures, compliance standards, and grievance redressal mechanisms. It plans to introduce stricter know-your-advisor (KYA) protocols for investment influencers and advisory platforms.

Analyst Views: Industry Must Adapt Quickly

Industry veterans welcomed the SEBI Chairman’s strong words. Rajeev Mehra, Chief Compliance Officer at Axis Securities, commented, “We’ve long needed this level of regulatory assertiveness. It sends the right message, especially to newer participants who may be vulnerable to bad actors.”

Others believe that increased oversight will lead to a healthier market ecosystem in the long term.

“While it may cause short-term compliance stress, the long-term result will be greater investor trust and reduced volatility,” said Preeti Nair, Portfolio Manager at TrueNorth Capital.

Balancing Growth and Regulation

SEBI’s challenge, however, remains maintaining a balance between ease of doing business and rigorous regulation. Pandey addressed this during his speech, emphasizing that “regulation should never come at the cost of innovation,” and hinted at more collaborative frameworks for startups and fintechs entering the capital market space.

He added that SEBI is in discussion with industry bodies to create regulatory sandboxes, where new financial products and services can be tested under supervision.

Investor Outlook: A Safer, More Transparent Market

The message from SEBI is being seen as a positive development for long-term investors, particularly those wary of scams or sudden volatility.

With stronger deterrents in place and new-age surveillance tools coming online, the Indian stock market could become a safer haven for both domestic and international investors.

“This is exactly the kind of leadership India needs to match its ambition of becoming a global financial powerhouse,” said Devika Rao, Head of Research at FinVision India. “Confidence builds when rules are enforced fairly and consistently.”

Zero Tolerance is the New Normal

Tuhin Kanta Pandey’s declaration marks a critical juncture in India’s capital market governance. As SEBI intensifies its clampdown on manipulation, companies, advisors, and investors will need to adapt to a more transparent and accountable environment.

The message is unambiguous: there is no room for foul play in India’s financial markets. And under Pandey’s watch, SEBI is determined to ensure that the rulebook is not just read—but rigorously followed.