Union Finance Minister Nirmala Sitharaman has urged the Securities and Exchange Board of India (SEBI) to be prepared for emerging challenges, with cybersecurity topping the list. She cautioned that a single successful cyberattack on a major exchange, depository, clearing corporation, or large broker could disrupt markets at a national scale, wipe out wealth, and erode public confidence for years.
Sitharaman was delivering the keynote address at SEBI’s 38th Foundation Day programme in Mumbai, where she also digitally launched the regulator’s nationwide investor awareness initiative, ‘Mission Jagrook’.
AI intensifying threat landscape
The Finance Minister noted that AI-led tools are making cyberattacks faster, more adaptive, scalable, and, in some cases, autonomous. These risks include automated discovery of system vulnerabilities, malicious source-code interference, attacks on software supply chains, and coordinated intrusions that evolve in real time to evade detection.
“Not just SEBI, but all regulated entities must remain exceptionally vigilant. The tools of attack are evolving rapidly, and the tools of defence must evolve even faster,” she said.
Rise in deepfake investment scams
Highlighting the risks of increasing digital adoption, Sitharaman pointed to the surge in fake investment videos and apps circulating on social media, many of which use deepfake AI to impersonate public figures and mislead investors.
SEBI’s cyber framework gets endorsement
In this context, the Finance Minister said SEBI has done commendable work through its Cybersecurity and Cyber Resilience Framework, which came into effect in April 2025, calling it a strong foundation for further action.
She also noted that SEBI’s Data Analytics and Digital Forensics Laboratory is leveraging advanced analytics and AI/ML models to detect complex market manipulation and network-based frauds.
Investor protection tools need scale-up
Sitharaman commended SEBI’s rollout of ‘SEBI Check’, which enables investors to verify payment details of registered intermediaries before transferring funds. “These are important interventions and must be expanded with urgency and visibility,” she said.
She further urged the regulator to invest significantly in public awareness campaigns across platforms and regional languages, alongside implementing rapid-response mechanisms to take down fraudulent content impersonating public officials.
Soft-touch regulation and consultation stressed
The Finance Minister underscored the importance of a soft-touch regulatory approach and public consultation for economic efficiency and effective governance. She advocated for principles-based regulation over excessively detailed rulebooks.
Referring to the Union Budget 2023, she noted that public consultation has been formally integrated into the regulatory process to enhance compliance quality and ease.
Global alignment of regulations
Sitharaman highlighted the increasing global integration of capital markets, stating that regulatory developments in one jurisdiction often influence practices worldwide. “Our investors are global, and our issuers engage international pools of capital. Regulatory conversations cannot remain purely domestic,” she said.
Grievance redressal and finfluencer crackdown
Emphasising investor trust, the Finance Minister said grievance redressal systems must remain credible, accessible, and timely. She noted that market confidence depends not just on returns, but also on the assurance of fair resolution of disputes.
She also praised SEBI’s action against unregistered “finfluencers”, stating that while financial education should be encouraged, the monetisation of uninformed retail investor trust must not be tolerated.
Push for KYC simplification
Sitharaman urged SEBI to lead efforts towards standardising KYC norms and simplifying and digitising processes across the securities market, citing the regulator’s scale, digital infrastructure, and institutional credibility.
SEBI highlights reform journey and market growth
Speaking at the event, SEBI Chairman Tuhin Kanta Pandey outlined the regulator’s reform journey, including the transition to screen-based trading, dematerialisation, rolling settlements, enhanced corporate governance, and stronger risk management systems.