SEBI to Introduce Safeguards Against Broker Terminal Misuse, Says Chairman Tuhin Kanta Pandey

Markets regulator Securities and Exchange Board of India (SEBI) is working on new rules to prevent the misuse of trading terminals operated by brokers. Speaking at an interactive session in Mumbai on Saturday, Oct. 24, 2026, SEBI Chairman Tuhin Kanta Pandey stated that the regulator is developing a specific framework to establish safeguards against such vulnerabilities.

Addressing an event organized by the Association of NSE Members of India (ANMI), Pandey emphasized the importance of cybersecurity within the financial sector. He urged the market ecosystem to treat cybersecurity as a critical business priority rather than a standard information technology expense.

In addition to terminal safeguards, SEBI is considering the introduction of a graded compliance system for brokers. This system would reflect individual broker scale, client exposure, and reliance on technology.

During the event, Pandey also highlighted regulatory initiatives concerning artificial intelligence. SEBI is exploring an AI sandbox to allow new tools to be tested safely while providing regulatory clarity to innovators. Furthermore, the regulator is finalizing guidelines on the responsible use of AI. These guidelines will adopt a tiered approach incorporating clear accountability, data controls, kill switches, and human oversight, aligning with the toolkit provided by the International Organization of Securities Commissions (IOSCO).

To streamline regulatory processes, Pandey announced that inspection portals will transition into a single digital workflow designed to make supervision faster and more consistent.

Discussing broader trends in retail broking, Pandey noted that the next wave of growth is expected to come from smaller towns and villages rather than major metropolitan cities. Citing SEBI surveys that indicate rising interest among Indian citizens in market investments, he advised the market ecosystem to help retail investors invest wisely and remain invested for the long term.

Addressing the broker community regarding client risk management, Pandey remarked that brokers are often the first to notice when a client's risk tolerance outgrows their financial resources. He encouraged brokers to treat Know Your Customer (KYC) requirements as an ongoing conversation focused on understanding client needs rather than a one-time documentation exercise.

"SEBI's push for terminal safeguards, graded compliance, and structured AI guidelines highlights a clear regulatory shift toward heightened accountability in the broking sector. For fintech startups and established brokerages alike, treating cybersecurity as a core business priority and implementing robust risk management frameworks is no longer optional. As retail participation expands beyond major cities into smaller towns, intermediaries must prioritize transparent client education and ongoing risk assessment to ensure long-term market stability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes