Must-Know Regulatory Changes for Indian Investors, Insights by Ritesh Patel

90% of investors have lost money only while trading in F&O. The objective shouldn’t be to enter the market just because it seems exciting. We want them to become learned investors , informed and responsible traders.

I would advise investors to understand that these regulatory changes are made in your interest.

If your broker , whether existing or new , is asking for a couple of extra documents or more information while opening your account, please be open and welcoming to that process.

Host (Shiv Narayanan):
Hello everyone, and welcome to another episode of Bazaar & Beyond, your go-to podcast for deep dives into financial markets, emerging trends, and investment insights shaping the world of business. I’m your host Shiv Narayanan, and today we’ve lined up a particularly insightful episode for you.

India’s stock broking industry is going through a wave of regulatory changes. SEBI and 

There’s been a noticeable surge in trading volumes, especially in the derivatives segment. A major driver has been the rise of new-age brokers using advanced technology to attract Gen Z and millennial traders. These investors are more independent and want to execute trades themselves, rather than relying on traditional broker-assisted models.

SEBI’s challenge is to protect these newcomers by ensuring systems are in place to prevent misuse of funds or securities. Real-time fund transfers, direct settlement into client demat accounts, and de-linking brokers from client assets are all part of that effort.

Q: What impact have these regulatory changes had on brokers, traders, and the overall market ecosystem?
Ritesh:
These changes have required brokers to overhaul their systems, especially their IT and operational frameworks. Earlier, margin requirements were calculated at the end of the day (EOD), but now it's real-time, which demands significant infrastructure upgrades , not just at the exchange level, but at the broker level too.

This means:

• Traders now get less leverage.
• Brokers must monitor margins in real time.
• Systems have to support immediate fund and securities settlement.

From a market liquidity standpoint, T+1 settlements have improved liquidity, helping traders access funds faster. However, adapting to these real-time requirements has added pressure on backend systems and operations teams.

Q: Are these new norms making the market more stable or creating more challenges for investors?
Ritesh:
They’re definitely making the market more stable. When a market event leads to a bad investor experience, it damages confidence not just for that individual, but for many others observing from the sidelines. SEBI’s goal is to build a strong foundation where investors can trust that:

• Their money is safe.
• Their investments are under their control.
• There are safeguards to avoid misuse or fraud.

With these frameworks in place, retail participation can actually increase over time because people will feel confident about entering or re-entering the market with better understanding and tools.

Q: From a risk management perspective, what challenges do stock broking firms face due to these changes?
Ritesh:
These are systemic changes. Brokers need to upgrade everything , front-end platforms, backend servers, human resources, compliance processes , to match regulatory expectations.

For example:

• Every new regulation (like margin updates or data collection) means changes to how account opening works, how transactions are settled, how risks are monitored.
• Even minor-looking frontend changes require major backend readiness.
• Staff also need to be trained on these updates , it's not just about tech but operational adaptability.

So yes, from risk management to IT, the entire internal architecture of brokerage firms needs constant upgrading.

Q: These changes can seem overwhelming for retail investors. What advice would you give them to navigate this evolving regulatory environment?
Ritesh:
I completely understand the concern. For seasoned investors and traders, adapting is already underway , slowly but steadily. But even for new investors, my advice is this:

• Don’t see these changes as a burden.
  They’re designed to protect you.
• If your broker is asking for more documents or information, such as income proof, profession, or credit score , it’s not to make your life difficult. It’s to understand your risk profile better.
• The better your profile is understood, the more appropriate tools, leverage, and trading access you’ll get. This is for your benefit.

So, rather than resisting these changes, treat them as part of building a secure and responsible investing journey.

Q: Are tighter compliance norms likely to discourage retail participation due to increased paperwork or costs?
Ritesh:
It might feel like that at first. Yes, opening an account today involves more documentation than before. But this isn’t limited to brokers , even banks and other institutions follow similar standards.

This level of profiling , income details, profession, creditworthiness , is essential to assess whether the investor understands and is capable of taking on certain risks. This also helps prevent misuse and protects the ecosystem.

So yes, it may seem like an added step now, but in the long run, it builds a safer environment for everyone.

Q: How is Mirae Asset adapting to these changes, and what are you doing to keep clients informed and compliant?
Ritesh:
At Mirae Asset, we prefer to stay two steps ahead. Even before a new regulation goes live , say, six months in advance , we prepare our systems, processes, and teams.

Here’s what we do:

• We preemptively update our IT infrastructure and operational frameworks.
• We conduct regular webinars, investor education sessions, and send proactive communications like emails and notifications.
• We have a dedicated research and education desk constantly working on making sure investors are informed , not just at the last moment, but well in advance.

The idea is to avoid surprises and ensure a smooth experience for clients as rules evolve.

Q: What regulatory trends should investors and brokers be prepared for in the future? Do you believe more reforms are needed?
Ritesh:
Absolutely. One key data point from NSE stated that 90% of investors have lost money in F&O trading. Especially during the recent bull market phase, a lot of retail investors started trading heavily in derivatives , without fully understanding the risks involved.

That’s why future reforms should focus on:

• Assessing an investor’s profile , their income, financial background, and risk-taking capacity.
• Ensuring only capable and informed investors are trading in complex products like futures and options.
• Stronger risk profiling before allowing exposure to high-risk instruments.

If we can implement a framework where product access is based on capability, it’ll protect investors and encourage responsible trading.

Q: What role can AI and technology play in these reforms and investor protection?
Ritesh:
AI is already transforming the financial world , and SEBI isn’t far behind. In fact, AI is now being discussed in areas like IPO processing, where systems can intelligently analyze and fast-track applications.

AI can contribute by:

• Enhancing risk management frameworks.
• Supporting investor decision-making , recommending trades, identifying risk, providing real-time insights.
• Personalizing financial journeys based on an investor’s goals and profile.

Fintech firms are already building intuitive front-end platforms that appeal to Gen Z and millennial traders. Today, even 15-16 year olds are curious about markets and companies , they want to learn, analyze, and invest.

AI helps democratize that access by putting research, education, and trading tools at your fingertips.

Q: What’s your final message to our listeners navigating this transformative phase in the stock broking industry?
Ritesh:
My message is simple , embrace the changes.

Yes, compliance norms are getting tighter. Yes, more information is being asked of you. But it’s all happening for your protection.

Don’t look at these developments as friction. Instead, look at them as a sign of a maturing, stable, and investor-first market. SEBI is doing its job, brokers are evolving fast, and together we’re building an ecosystem where your money stays safe and in your control.

The more confident you feel, the more you’ll participate. And the more you participate , with proper knowledge , the better your chances of building long-term wealth.

Host (Shiv Narayanan):
Thank you, Ritesh, for your time and valuable insights. We've covered a lot today , from regulatory changes and SEBI’s role to the evolving role of brokers, risk profiling, and AI in trading.

To our listeners , if you found this episode helpful, don’t forget to share it, leave your feedback, and subscribe to Bazaar & Beyond for more engaging discussions.

Until next time , stay informed, invest wisely, and happy investing!