Market regulator Tuhin Kanta Pandey appears genuinely keen on protecting investors by ensuring that they have access to corporate information in an easy-to-understand format. In a recent media interview, he signalled that the Securities and Exchange Board of India (SEBI) will take on this task directly. "We are planning further reforms to introduce a concise summary of key points for easier comprehension," the SEBI chief reportedly said.
This is good news. In a country struggling with low financial literacy, a credible, simplified source for financial information is imperative. If implemented, this move will require, as its base, a centralised repository of corporate filings that is currently hosted by the two stock exchanges. With the Securities Market Code Bill, 2025, now proposing to strengthen the regulator by merging statutes like the SEBI Act, the Depositories Act and the SCRA (Securities Contracts (Regulation) Act, 1956), the timing of this initiative is not just appropriate—it is critical (Read: SEBI’s Power To Grow: But Who Will Watch the Watchdog?).
Why Is It Important?
However, we must examine this shift from two perspectives.
First, while the intent to safeguard investors is laudable, SEBI faces a monumental challenge: cutting through the ‘greed and gullibility’ of a new generation of market participants and getting them to read the information.
SEBI’s own survey threw up a startling finding: the investment choices of 62% of retail investors are dictated by ‘finfluencers’ on social media. Even more concerning, separate studies indicate that a vast majority of these influencers operate without registration, often failing to disclose blatant conflicts of interest.
Another SEBI study shows that 90% of those who invest in derivatives lose money—an overwhelming 93% of those surveyed found these social media gurus ‘moderately trustworthy’ and on par with what ought to be primary sources of information.
In practical terms, this means that SEBI may have ordered Avadhut Sathe, a popular finfluencer, and his company to deposit ₹546.17 crore of unlawful gains, but investor may still find him ‘trustworthy’ because he leads them to specific investment decisions, while the information provided by SEBI, although accurate, requires them to make an effort to take independent decisions.
The SEBI survey quoted earlier showed that 63% of Indian households are aware of securities market products, but actual market participation is a low 9.5% or just 32mn (million) households, primarily because Indians are very risk-averse. SEBI’s move to provide credible and easy to understand information to the public, may give confidence to risk-averse individuals to participate in the capital market.
In an era where a 30-second viral clip carries more weight than a 300-page prospectus, SEBI’s move to provide ‘concise summaries’ is a necessary attempt to reclaim the narrative from unregulated digital voices and help diversify the investor/trader profile.
How Will This Work?
The second perspective involves the infrastructure itself. For years, India has relied on a fragmented filing system jointly run by the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) via the corporate filing & dissemination system (CFDS). While efficient for market dissemination, this ‘exchange-centric’ model lags the cohesive power of the US EDGAR (electronic data gathering, analysis, and retrieval) system, since it is designed for financial experts and accountants rather than ordinary investors who have thronged the market since 2020.
The US EDGAR system is often cited as the gold standard for corporate filing because it is a centralised, regulator-run repository. It utilises Inline XBRL which allows data to be simultaneously human-readable and machine-tagged. This ensures that a retail investor and a high-frequency trading algorithm are able to look at the exact same information in real-time. In contrast, India’s system has been improving steadily, ever since SEBI transferred the responsibility of maintaining corporate filings to exchanges in 2010, after abandoning its own corporate filing project called EDIFAR (electronic data information filing and retrieval) which was to have mirrored EDGAR.
Over the years, the two exchanges have created an effective reporting system that aggressively flags compliance delays and responds with punitive action. The CFDS system also uses XBRL for financial results and shareholding patterns, but the information remains fragmented for historical reasons. If a company is listed on both exchanges, the data is often mirrored but remains within the distinct silos of the BSE and the NSE portals.
Since 2024, SEBI has put in place a single filing system, synchronising reports across exchanges to create a virtual centralised repository. However, compared to EDGAR, the Indian interface remains cumbersome for historical research. It lacks a seamless, full-text search capability that allows an investor to quickly track a specific keyword, such as ‘litigation’ or ‘default’, across several years of a company’s history.
If SEBI follows through on chairman Pandey’s plan to use artificial intelligence (AI) tools to disseminate comprehensible, timely and relevant information, it could leapfrog the limitations of the current exchange-run portals. The question is: Will SEBI take charge of the last-mile of dissemination?
Importance of Timing
The introduction of the Securities Market Code 2025, by subsuming the SCRA, empowers SEBI to act as the sole custodian of corporate data. This sets the stage for the regulator taking charge of corporate filing, once again, by creating a single, centralised repository that is not a collection of PDFs, but a searchable, tagged and AI-ready database.
Remember, a filing system is only as ‘transparent’ as the regulator is independent and the shadow of political interference and looms large. There could also be internal resistance to taking on more responsibility. Notice how SEBI’s senior officials have invoked ‘privacy concerns’ when asked to disclose their personal assets by a high-powered committee report. History shows that market intermediaries and large corporations often lobby to keep certain disclosures ‘buried’ in complex annexures. There is always a risk that political pressure could dilute the ‘concise summary’ project into a mere PR exercise by failing to put out information on sensitive matters.
Whoever is put in charge, the credibility of this exercise rests on the democratic dissemination of sensitive information. Whether it is a routine board meeting or a hostile takeover, the information must be available instantaneously and formatted for the common man, not just the institutional player.
SEBI is well-placed to lead this sequencing. By leveraging the new Securities Market Code and resisting the inevitable pressures of those who thrive in the ‘opaque middle’, SEBI can reinforce India’s capital-market credibility. Only then will retail investors be empowered to look past the ‘finfluencer’ hype and see the corporate reality for what it truly is.
Investors are required to keep watch over the media reports of corporate wrong doings as flagged by different sources as its almost impossible to analyse the Corporate filings on their face.In present times of technology and corporate structure, it's not possible to detect pitfalls by an ordinary investor atleast. There needs to be strengthening of systems at different levels to protect investor interest.
Almost five years ago, a single sentence tucked into finance minister (FM) Nirmala Sitharaman’s Budget speech of February 2021 should have reshaped India’s capital market regulation: “I propose to consolidate the provisions of the...
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
