SEBI to make Direct Plans default on AMC digital platforms from November 1, says Tuhin Kanta Pandey

Direct Plans generally have lower expense ratios because they do not involve distributor commissions, while Regular Plans are sold through distributors and carry higher costs. Addressing NDTV Profit IGNITE in Mumbai, Pandey outlined a broader regulatory agenda covering primary markets, foreign portfolio investors, corporate bonds, investor protection and the use of artificial intelligence in securities-market supervision.

Pandey said SEBI was reviewing listing and disclosure obligations and would revisit the regulatory framework governing mainboard initial public offerings (IPOs) and follow-on public offers (FPOs). The regulator is also examining the SME IPO framework and the Innovators Growth Platform to improve access to public capital for growing businesses. Also:  SEBI censures Axis Capital for guarantee-like support to Sojo Infotel NCDs

The chairman said SEBI had proposed stronger monitoring of funds raised through public issues to improve transparency and accountability in how companies deploy investors’ money. The regulator is also reviewing the framework for debenture trustees, with a focus on stronger oversight and safeguarding investors’ interests in corporate debt. In the foreign portfolio investor segment, SEBI is looking to simplify compliance for foreign portfolio investors (FPIs), including by examining longer KYC review cycles for eligible investors.

“We are engaging with RBI to harmonize SWIFT-based certification of KYC documents for FPI bank accounts,” Pandey said, adding that the regulator was also examining longer KYC review cycles while retaining safeguards and requirements to report material changes. SEBI aims to reduce the time required for FPI onboarding from months to as little as five business days through digital workflows and system integration.

The regulator has also introduced the SWAGAT-FI framework to provide simpler compliance and single-window access to eligible foreign investors. On corporate bonds, SEBI is consulting on Fixed Income Channel Partners to expand distribution through regulated online bond platforms beyond major cities. The regulator is also engaging directly with issuers to understand the hurdles they face in raising funds through the debt market.

Technology and investor protection are other priorities. Pandey said SEBI was expanding the use of artificial intelligence to detect potential compliance violations and improve market supervision. He said the R(AI)DAR tool, which checks mutual fund and distributor advertisements for compliance, was being extended to advertisements issued by other intermediaries. SEBI is also developing an in-house system for AI-driven analysis of compliance reports submitted by portfolio managers and AMCs.

In addition, it is piloting an AI-based tool to monitor disclosures by debenture trustees, stock exchanges, depositories and credit rating agencies. The system is intended to help flag early signs of corporate debt defaults. SEBI is also exploring a domestically governed AI model for the securities market, with its technical feasibility, governance and data requirements under examination. On investor protection, Pandey said the regulator had escalated more than 2.2 lakh instances of misleading online content to social media platforms for takedown.

Its in-house AI tool, Sudarshan, accounted for more than 40% of these escalations. Pandey said the regulator’s broader objective was to make markets more accessible and efficient while ensuring investor protection, transparency and resilience as India’s financing needs expand.