Digital payment safeguards | Insider trading | The Bridge | Climate adaptation | SEBI | Conflicts of Interest | Stock markets | The TrustBridge Newsletter | Issue 33
Alphonso & climate | IFSCA orders | Court reforms | Regulatory orders | Digital payments
This is TrustBridge’s monthly newsletter. TrustBridge seeks to improve India’s business environment by improving the rule of law. This month, we submitted comments to the Reserve Bank of India on its Discussion Paper exploring safeguards against digital payment frauds. We published new research on market reactions to SEBI's insider trading enforcement, analysis of SEBI's conflicts of interest framework, and a piece on treating farm and weather data as public infrastructure for climate adaptation. We also launched The Bridge, a new series scrutinising the quasi-judicial work of India's regulators. Beyond our research, our team contributed in conversations on academic integrity, financial sector reforms, and court reforms.
Read on to see what’s kept us busy.
Policy inputs and submissions
Inputs on safeguards in digital payments to curb frauds
Renuka Sane, Pratik Datta, Amol Kulkarni, and Aastha Asthana submitted comments to the Reserve Bank of India (RBI) on its Discussion Paper released on April 9, 2026 titled 'Exploring safeguards in digital payments to curb frauds'. Using the Regulatory Impact Analysis framework, the submission analyses two of the four proposed options: a one-hour lag for person-to-person APP transactions above INR 10,000 (Option 1) and a default credit ceiling on all bank accounts (Option 3) and finds both to be over-inclusive, imposing universal friction to address a failure concentrated in a small subset of transactions. Key recommendations include:
the one-hour delay under Option 1 should be triggered only where a transaction crosses a calibrated risk-score threshold, rather than applying automatically to all transactions above INR 10,000;
all accounts should default to normal credit access, with credit ceilings applied selectively based on identified risk indicators rather than imposed on every account;
the RBI’s own tools such as the Digital Payment Intelligence Platform and MuleHunter.AI, capable of real-time transaction-level beneficiary risk scoring and detecting mule accounts respectively, offer the targeted approach this problem demands; and
the Discussion Paper quantifies neither the expected fraud reduction nor the direct and indirect costs of the proposed measures, leaving stakeholders unable to meaningfully assess proportionality.
Blogs
On May 11, 2026, Arjun Gupta, Sonam Patel, and Renuka Sane authored an article on the Leap Blog, 'Market Reaction to Insider Trading: Evidence from Regulatory Orders in India'. The article examines whether Indian stock markets react to SEBI insider trading enforcement actions and SAT appellate decisions, finding no statistically significant market response in sharp contrast to negative abnormal returns documented in the US and UK. The authors attribute this null result to high appeal and reversal rates, long enforcement delays, and persistently low penalty amounts, raising questions about whether SEBI's enforcement actions are achieving the goals that justify the expenditure.
Indian stock markets exhibit no statistically significant response to insider trading enforcement, in contrast to the negative abnormal returns documented in the US and UK. This result is robust across SEBI final orders and SAT appellate decisions, and persists even for high-severity violations involving senior insiders and large monetary outflows. The functioning of SEBI entails considerable public expenditure, and the Board has, over time, sought progressively wider powers — including expanded surveillance capabilities. Given this, the question of what is actually being achieved warrants serious scrutiny. A stock price reaction to an enforcement order is one observable signal of whether the market believes the enforcement actions carry some significance. A null result across many orders suggests the market does not view these actions as conveying meaningful new information. It is, therefore, worth questioning if enforcement actions are advancing the goal that justified the expenditure in the first place.
Op-eds
On April 17, 2026, Aastha Asthana and Bhavin Patel authored an article in SCC Online Blog, 'SEBI's Conflicts of Interest Framework: Analysis', examining gaps in SEBI's existing conflicts of interest framework across three dimensions: disclosure obligations, investment restrictions, and post-employment rules. Drawing on international comparators such as the SEC and FCA, the piece argues for a tiered, role-based approach that balances institutional integrity with reasonable market access.
On three key questions, we critically examined the existing framework, and conducted a comparative study of leading international agencies such as the OECD and the World Bank, and regulators like the SEC and FCA. Our recommendations employ insights from these comparisons, and emphasise adopting a tiered approach to disclosures, easing investment restrictions for junior personnel in non-sensitive roles, and implementing a risk-based assessment for post-employment restrictions for all personnel.
We suggest that SEBI’s conflicts of interest framework needs changes to address gaps and inconsistencies, and to bring it in line with prevailing international standards. This need for change is based on the requirements of consistency and comprehensiveness.
Renuka Sane authored an opinion piece on April 28 in The Print, 'Want to save Alphonso mango from heatwave? Start with open data', examining the climate crisis facing Alphonso mango farmers in the Konkan region — where production is down 60-90 per cent this season, as a warning sign for Indian agriculture more broadly. The piece suggests that the standard policy response of compensation is unsustainable when climate change is structural rather than cyclical, and makes the case for treating farm and weather data as public infrastructure essential to any serious adaptation strategy.
If we keep following the same practices under different climatic conditions, we will keep debating compensation amounts every year. In the new normal, compensation does not make for a sustainable strategy. We need a shift in the way we have been organising our production, infrastructure, and consumption. This is the central objective of climate adaptation. Any serious plan to adapt to climate change has to start by treating farm and weather data the same way we treat roads, electricity, or the internet: as essential infrastructure the nation depends on.
The Bridge
This month, TrustBridge kickstarted The Bridge — a new series dedicated to scrutinising the quasi-judicial work of India's regulators. Regulatory orders shape markets, govern disputes, and test the rule of law. Yet how regulators decide, and whether they could decide better, rarely receives the attention it deserves. We launched the series with two pieces.
On April 30, 2026, Natasha Aggarwal and Bhavin Patel authored their first piece ‘Stitch in time: An early evaluation of the IFSCA’s adjudicatory orders’, evaluating the International Financial Services Centres Authority’s seven adjudicatory orders against TrustBridge’s Good Order Writing indicators. The piece finds that while the IFSCA has successfully established the architecture of good decision-making — with consistent structural clarity and procedural completeness — its orders show recurring weaknesses in sanction justification and treatment of disputed facts, gaps that are best addressed before they become institutionalised.
As one of India’s newer SRAs, the IFSCA has a short history of issuing adjudicatory orders. Their website currently lists eight documents in the Enforcement section (seven orders, the earliest dated 29 July 2024 and the latest, 6 April 2026, and one warning letter). The IFSCA made headlines recently when, in a first-of-its-kind action for the new SRA, it cancelled the broker-dealer registration of String AI IFSC Private Limited.1 This is seen as a significant move on the regulator’s part, potentially signalling an escalation in its enforcement actions, and moving away from the ‘marketing mode’ stance that market participants suggest it had hitherto adopted. An examination of the regulator’s enforcement practices would therefore be timely.
On May 8, Natasha Aggarwal and Bhavin Patel authored ‘How much does a poorly-written order cost?’, examining the opportunity costs imposed by the Competition Commission of India’s 2020 order against Grasim Industries, which was set aside and remanded by the NCLAT in May 2026 after over six years. The piece demonstrates how applying Good Order Writing indicators at the drafting stage could have avoided the controversy, and the unproductive lock-up of Rs. 30.16 crores over that period.
We point out the opportunity costs of poor order writing in one instance; but consider what the aggregate value of such practices across regulators would be over the period of a single year, over a few years, or over a decade. And how little in comparison it would take to avoid such costs - LLMs and Generative AI make solutions like the Order Review Tool accessible, and regulators and researchers have the domain expertise to make such tools capable and effective. But first we need to acknowledge the scale of the problem, and open our minds to the possibilities that imaginative solutions can offer.
Events
On May 9, Prashant Narang moderated Session I of the multidisciplinary webinar on 'Multidisciplinary Approach to Academic Integrity: Challenges and Remedies'. The session brought together distinguished speakers including Justice V. Gopal Gowda, former Judge of the Supreme Court of India; Prof. Upendra Baxi; Prof. N. L. Mitra; and Prof. Jason M. Stephens. The discussion examined academic integrity across education, policy, and research, covering questions around AI use, plagiarism, institutional culture, and legal education reform.
On May 13, Pratik Datta participated as a panelist in the session on 'Bankruptcy across jurisdictions: Frameworks and Cultural Contexts' at the MDI Gurgaon – IBBI Conference on Powering Viksit Bharat 2047 through Financial Sector Reforms. The panel discussed comparative insolvency frameworks and the cultural contexts that shape their design and functioning across jurisdictions.
Podcasts
On April 21, Chitrakshi Jain featured on the podcast 'Law, Laughter and Beyond', hosted by the Kautilya Society at NUJS, in a conversation on court reforms. She spoke about her co-authored book Tareekh Pe Justice, which offers a window into why district courts and their judges behave the way they do, and discussed how the National Judicial Data Grid overestimates pendency, among other findings. Chitrakshi and Prashant Reddy also shared their theory of change on judicial reforms, their instincts on why High Court judges behave the way they do, and how legal education could evolve in light of their findings.
Collaborate
If our work resonates with you, we would love to collaborate. We focus on financial markets regulation, energy transition, and contracts and dispute resolution. Reach out at info@trustbridge.in.
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