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SEBI Deploys AI to Track Financial Influencers Giving Illegal Investment Tips

The Securities and Exchange Board of India (SEBI) is actively deploying Artificial Intelligence tools for real-time surveillance of market malpractices, including tracking financial influencers who give illegal investment advice. Chairman Tuhin Kanta Pandey stated that AI is also being used to monitor advertisements and conduct proactive cyber security audits. SEBI is preparing to release a consultation paper for public input on proposed changes to Portfolio Management Services (PMS) regulations. Furthermore, SEBI and the Reserve Bank of India are jointly developing a corporate bond index and related products to deepen the debt market.

Key Points: SEBI Uses AI to Track Financial Influencers in Real-Time

  • AI for real-time market surveillance
  • Tracking illegal investment advice
  • Review of PMS regulations
  • SEBI-RBI corporate bond index
  • Proactive cyber security audits
2 min read

Using AI for 'real-time tracking' of financial influencers giving illegal investment advice: SEBI Chief

SEBI Chairman reveals AI tools are being used for real-time detection of illegal investment advice and insider trading, with a PMS review underway.

"We are using them on financial influencers and those transgressing the lines on investment advice. - Tuhin Kanta Pandey"

Mumbai, February 23

Stating that Securities and Exchange Board of India is using Artificial Intelligence tools for real-time insider trading detection, the regulator Chairman Tuhin Kanta Pandey on Monday said, "We are using them on financial influencers and those transgressing the lines on investment advice."

"AI is being increasingly used by us. We are using them on financial influencers and those transgressing the lines on investment advice. It is also being used on certain advertisements to ensure they are under SEBI rules," Pandey said while responding to a query on how the regulator is using Artificial Intelligence (AI) tools for real-time insider trading detection,

"AI is also being used by SEBI in terms of looking at audit of cyber security so that we can proactively find out where the problems are," he said addressing a press conference at NISM Campus in Mumbai.

The SEBI chief added on the use of AI that, "It's like a tool much like we were using different other IT tools like spreadsheets, and other things. Now you know there are more advanced tools in the form of AI."

"We will also have to see whether there are any risks to the market from the use of AI, and also pinpoint clearly the responsibility on those who are deploying the AI tools," he added.

"I think regulation of AI will go in tandem with the use of AI, both by the regulator and the market participants," he said.

Responding to queries in the press conference, regarding market stability, Pandey said that SEBI is exploring the potential of Artificial Intelligence for "real-time detection, rather than just reactive enforcement" of market malpractices.

Further, the SEBI chief also confirmed that a "consultation paper will be released for public input on the proposed changes to Portfolio Management Services (PMS) regulations."

He clarified that while the "review of PMS regulations is driven by the need to rationalize certain aspects identified since 2020," the exact "scope of the PMS regulation review is not yet finalised, as proposals are still maturing."

Beyond portfolio management, the Chairman also revealed that "SEBI and RBI are jointly working on developing a corporate bond index and related products," which are intended to be "traded on exchanges." This joint effort aims to deepen the debt market, with Pandey noting that the product "falls under both jurisdictions due to trading on exchanges."

- ANI

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Reader Comments

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Priyanka N
Finally! I hope this means action against those celebrity endorsements for trading apps too. My cousin lost money following advice from a famous actor's ad. Real-time detection can prevent such scams. Good move.
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Aman W
Using AI is good, but who will regulate the regulator's use of AI? Pandey sir mentioned pinpointing responsibility, which is crucial. We need clear guidelines to prevent overreach and protect privacy. The tool should not become a weapon.
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Sarah B
As someone new to investing, I find the influencer space very confusing. Some give genuine education, others are just promoting. If SEBI can create a verified list or badge for legitimate advisors, that would be more helpful than just policing.
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Karthik V
The joint effort with RBI on a corporate bond index is the bigger news here! Deepening the debt market is essential for infrastructure funding. Hope they make it accessible to retail investors like us, not just institutions.
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Nikhil C
Real-time detection sounds impressive, but SEBI's enforcement has been slow in the past. The tech is only as good as the follow-up action. Will they have the manpower to act on AI's alerts? Implementation is key, bhai.

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