SEBI on the Couch: Fighting Gen Z’s Casino Markets with 1992 Rules 

SEBI: My 1992 rules fail Gen Z's gamified trades. Wealth? Gone. Trust? Ash.

Therapist: Think like a psychologist, not a cop.

An imaginary leather couch creaks. SEBI’s grip tightens around a dog-eared 1992 charter.

SEBI: My existential crisis mounts. I fined a finfluencer ₹5 million. Banned over a dozen trading apps. But what’s the point? Gen Z is hooked on “fractional FOMO.” Algorithms front-run their panic. My enforcement budget is stretched thin. Investor losses spiral. I ban. I penalise. But the speculation frenzy persists. Why won’t they comply?

Therapist: It seems you’re trying to heal a complex behavioural crisis with outdated tools from 1992. That’s understandable. It’s classic institutional burnout. But let’s slow down. Tell me, what worries you the most these days? What thoughts keep you awake at night?

SEBI: You see those trading apps with flashy animations? Confetti for tiny gains on low-value stocks. Rewards like spin-the-wheel gimmicks. Leaderboards turning regular traders into gladiators in a game they barely understand. My required disclosures get buried deep in cluttered app screens. Every glowing 'win' animation pulls another retiree into risky trades, slowly eroding their savings. Fintech CEOs celebrate spikes in user activity, until legal challenges knock on their doors. This is India’s market reality in 2025.

Therapist: I hear you’re trying to fix the symptoms; racing after apps, influencers, those flashy triggers. But the real issue is deeper. It’s the way these platforms shape behaviour, that’s the core.

This isn’t just about tricks; it’s operant conditioning disguised as user experience. Spins and badges light up the brain’s reward system, the same one that gambling machines exploit.

Your rules expect people to be perfectly rational. Yet decades ago, Prospect Theory showed us humans aren’t wired that way, we fear losses more than we value gains. And, these apps take advantage of that by making wins look huge, losses invisible. It’s like you’re a cop chasing pickpockets in a casino designed to keep people addicted. 

SEBI (leaning forward):  Then what? Shut the whole casino down?

Therapist: No, what’s needed isn’t outright bans, but thoughtful redesign. It’s about precision, not prohibition. Imagine trading those heavy handcuffs for a chisel that sculpts better behaviours. Start by removing the flashy casino tricks. No more spin wheels, confetti, or loot-box-style wins. Instead, require clear cognitive dashboards that tell investors, “Volatility just spiked 40%. Historical loss odds have increased.” Transform those apps from dopamine-fuelled slot machines into trusted fiduciary coaches. This isn’t just ticking compliance boxes, it’s building reputation armour for CEOs and creating a foundation for ethical, sustainable user engagement. And remember, this isn’t a new concept, it’s a thoughtful extension and modern interpretation of SEBI’s existing charter focused on investor protection, adapted for today’s digital realities.

Cognitive Capital
SEBI: But I feel so unheard. I say, ‘No guarantees on returns,’ but finfluencer’s reel screams, ‘10x money in 30 days!’ Where’s the disclosure? I keep banning them yet those reels keep flooding my feed. It’s like financial Darwinism with no rules.

Therapist: I understand how it can be frustrating. It’s a classic herd behaviour fuelled by dopamine and the deep need for social validation. Those tiny disclaimers buried at the bottom? They don’t stand a chance against primal brain circuits. Instead, imagine this: a clear, upfront warning that says, “73% of retail investors lose money with this strategy. Proceeding means probable financial loss.” It’s not about censorship; it’s cognitive Kevlar, which protects investors and even shields regulators from backlash. This kind of behavioural nudge, grounded in the Theory of Planned Behaviour, doesn’t rely on investors reading lengthy documents. It meets them right in the moment before they hit ‘Buy,’ offering a crucial pause to rethink.

I see your Mutual Fund ads proudly say “Mutual Funds Sahi Hai”—that’s a great start. But let’s go deeper. Imagine if your apps could sense when investors are overtrading and gently pause them for just 15 seconds with a mindfulness-based cognitive therapy exercise. Then, offer a personalised nudge, like asking, “Is FOMO driving this trade?” These aren’t just gimmicks, they’re proven digital circuit-breakers designed to curb impulsive behaviour. When investors are calmer, markets follow, trust grows, and that trust becomes valuable political capital. That kind of stability can truly be your lasting legacy.

SEBI: But it’s not my job! I’m not a behavioural scientist.

Therapist: I understand it feels overwhelming. Your job is to protect — and how you protect must evolve with time. Let’s keep it easy. Consider small meaningful steps like launching SEBI’s Behavioural Finance Unit by 2025-26, creating India’s own version of the UK’s Nudge Team. You can then publish a comprehensive Nudge Code that goes beyond bans, focusing on building reflexive, behavioural guardrails. Imagine apps providing an amygdala-cooling prompt during market crashes; that’s yogic mindfulness made practical, helping investors stay calm and make better decisions.

SEBI (Exhales): So I am not failing? Am I just using the wrong methods?

Therapist: I am so happy that you can see that banning market madness only wears you out. Consider designing mindfulness into the system. That’s where lasting strength lies. Go ahead, build that thoughtful code that supports investor well-being. Imagine how a simple pranayama prompt could shield more wealth than all the fines you ever impose. Because when markets honour cognitive capital, investor sanity becomes not just a personal victory; it transforms into India’s most strategic asset and your ultimate alpha.