SEBI Chief Advises Retail Investors To Remain Patient Amid Market Volatility

Securities and Exchange Board of India Chairman Tuhin Kanta Pandey said India’s capital markets have been significantly affected by geopolitical developments and urged retail investors to remain patient during the current phase of heightened volatility.

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Speaking about the recent market movements, Pandey said global geopolitical tensions have impacted financial markets across regions. According to Reuters, he noted that episodes of extreme volatility generally do not persist for long periods.

Pandey said the key measure of a resilient market system is its ability to function smoothly even during periods of sharp price fluctuations.

“The real test for the market is whether the system continues to function smoothly and efficiently when volatility comes,” he said in remarks cited by Reuters.

Global Developments Affecting Capital Markets

Pandey said financial markets have become more interconnected with global developments as India’s capital markets have expanded significantly over the past decade.

He noted that the rapid spread of information across markets has increased the speed at which financial markets react to developments. According to his remarks, news and opinions now move quickly through global information networks, often triggering immediate responses in market prices.

The SEBI chairman further added that international developments and geopolitical events are being monitored.

According to Reuters, global efforts are underway among policymakers and financial institutions to restore stability in financial markets affected by geopolitical tensions.

Regulatory Changes And Market Access

Pandey also referred to the government’s recent notification amending the Securities Contracts (Regulation) Rules, stating that the objective of the changes is to simplify access to capital markets.

These rules pertain to different areas of securities trading and listing requirements of the capital markets in India. Any changes to the rules are aimed at increasing participation and improving efficiency for market players.

Mr. Pandey stated that the regulatory frameworks play an important role in the proper functioning of the markets, though he added that regulation by itself does not lead to efficient markets.

Pandey said that regulatory frameworks play an important role in ensuring orderly market functioning, but emphasized that regulation alone cannot create efficient markets.

“Efficient markets are a shared responsibility,” he said, referring to the roles played by regulators, market institutions, and investors.

Expanding Role Of Capital Markets

The SEBI chairman also noted that capital markets are playing an increasingly important role in economic development.

According to his remarks, financial markets are gradually moving beyond their traditional role of supporting economic activity and are increasingly influencing economic growth directly.

Pandey said that as markets deepen and participation expands, their contribution to investment and economic development becomes more significant.

These remarks have come at a time when Indian financial markets have been experiencing volatility due to geopolitical events in the world and economic changes.