The Securities and Exchange Board of India (SEBI) has set up a new committee to explore and deliberate on emerging technologies such as blockchain, and their effect on financial markets.
Chaired by T.V. Mohandas Pai, Chairman, Manipal Global Education, the “Committee on Financial and Regulatory Technologies (CFRT)” would study the recent trends in fintech developments in global securities markets, and identify the opportunities and challenges from new fintech solutions and its impact on domestic securities market.
“Technology is affecting financial markets through various channels be it technology driven financial market platforms for fund raising (such as peer to peer lending, crowd funding), online access to investment products (e-KYC, online mart investment products, Robo-advisory, and online portfolio management), post-trade market for securities (through new database technologies such as blockchain and other distributed ledger technology), product and process innovation (such as algorithmic trading, algorithmic driven synthetic investment products, virtual currencies, digital payment gateways), etc.” SEBI said.
SEBI further announced its plan to set up regulatory sandbox to facilitate the adoption of fintech and foster financial innovations. It said that the committee would assess:
“technological solutions for regulatory functions of SEBI viz. information management and data mining, risk management including cyber security, intermediary supervision, consumer protection, etc. through application of new technological solutions like application of distributed ledger technology, big data, data analytics, artificial intelligence, machine Learning etc.”
The announcement follows the recent efforts by the Reserve Bank of India (RBI) to explore blockchain potential for the Indian banking system. Earlier this year, the Institute for Development and Research in Banking Technology (IDRBT), an arm of the RBI, revealed that it organized a workshop on blockchain technology aiming to prepare a white paper on implementation of the technology in the areas of banking and finance in India. IDRBT also outlined a prospective roadmap for the adoption of blockchain technology to banking and finance in India.
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