Brokers and mutual funds need to move past compliance checklists to build resilient capital markets: SEBI Chairman

Brokers, mutual funds, distributors, and advisors must move beyond compliance checklists and act decisively to build a more transparent and resilient capital market, said SEBI Chairman Tuhin Kanta Pandey at the Morningstar Investment Conference India.

Pandey further said that financial intermediaries are expected to play a stronger, more proactive role in safeguarding investor trust and market integrity.

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Intermediaries form the backbone of India’s financial system by channelling funds from savers to enterprises and driving economic growth. But as technology, innovation, and retail participation reshape the marketplace, new risks have emerged, Pandey said. “By managing risks, conducting due diligence, and promoting financial awareness, intermediaries are contributing to financial inclusion, wealth creation, and greater market stability,” Pandey said, adding that their role today goes far beyond transaction execution.

Investor protection and market integrity, Pandey stressed, must move from being regulatory slogans to everyday practice. True investor protection means ensuring investors receive clear and accurate information, their assets are held securely and separately, and they have access to redress when things go wrong.

Market integrity, in turn, demands transparent and fair dealings, strong governance, and resilience to operational or behavioural shocks.

Sebi Chairman noted that investors today expect not just market access but fair access. Intermediaries must ensure that their dealings, transactions, and payouts remain clean, separated, and auditable.

Transparency, Pandey said, is foundational to maintaining confidence in the system. With product innovation accelerating, he urged intermediaries to take greater responsibility for clear disclosures and robust due diligence. Every product offered must be backed by an understanding of its risk, cost, and suitability to client profiles, according to Pandey.

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He also underlined the importance of asset safety and operational resilience. Investors expect their holdings to remain secure even when an intermediary is under stress, which calls for strong back-office systems, cyber resilience, and contingency planning. “A single breakdown can shake confidence in the entire market,” he warned.

He concluded by highlighting culture, ethics, and governance as the ultimate differentiators. Culture, Pandey said, is reflected in how incentives are structured, how leaders behave, and how credible whistleblower systems are. “Intermediaries are not just service providers. They are custodians of trust in the financial system,” SEBI head said, urging the industry to embody that responsibility in letter and spirit.