Will leverage tech to crack down on market manipulators, says SEBI chief

The Securities and Exchange Board of India (SEBI) will enhance surveillance and enforcement on market manipulators and cyber fraudsters through technology and use Artificial Intelligence (AI) to widen the reach of its investor awareness programmes, its Chairman Tuhin Kanta Pandey told The Hindu in an interview. He said SEBI aims to have “optimum regulation” in the capital market without “irritating” the stakeholders – exchanges, investors, brokers – such that “the market functions with integrity”.

The SEBI chief said that ever since he assumed charge last year, SEBI has rolled out 58 initiatives to ease business processes in the capital market, nine broad initiatives to make the market investor-centric and educate investors to make better choices. SEBI has made four changes to strengthen the framework regulating market intermediaries such as exchanges. It has introduced 13 measures to develop the capital market and six regulations to cool down speculation and stabilise the equity derivatives segment, he said.

Also read | SEBI cracks whip on market manipulators

Tech-driven initiatives

A lot of SEBI’s initiatives were technology-driven, said Mr. Pandey, highlighting the development of SEBI Check, a tool within the UPI interface that identifies registered intermediaries for investors before they make a payment. The tool is expected to rein in fraudulent brokers or traders who promise unreal gains to investors and dupe them.

The SEBI chief urged investors to be safe and be proactive while using these tools to identify cyber frauds. “If someone is approaching, people should say that ‘you are a fraud as your account does not show SEBI Check. I will lodge an FIR against you’,” he said, adding that people need to visit their broker’s office or bank branches at least once before making an investment.

He said SEBI is planning to run campaigns to popularise these tools as part of investor education initiatives. The market regulator has collaborated with Bengaluru-based AI company SARVAM to widen the reach of such efforts.

“We have also done a pilot AI campaign with SARVAM where they have reached out to about 3,85,000 people through calls, and these calls were made through an AI process in multiple languages to explain about the SEBI Check tool,” he said.

‘Disciplined and long investing’

Mr. Pandey inherited a correcting stock market in which retail investors may not be able to make returns they saw during the post-Covid rally. With the markets falling amid sustained selling by foreign investors and geopolitical uncertainly, he said the SEBI’s role was to make sure that there were no major instabilities and some market participants “do not act too smart”.

The SEBI chief said returns were contingent on multiple factors, and gains should not be judged based on one period alone. “People have always compounded their wealth over a period of time (through) disciplined and long investing,” he said, adding that the Indian markets were stable and the economy was growing.

Speaking on the widespread speculation in options trading (a derivative instrument which is used to protect investors from crashing stocks leading to losses), he said that this was limited to short duration options. With some stakeholders proposing many ideas, including restricting “unsuitable” players from the market to ensure stability, Mr. Pandey said there were no signs of instability in the markets. “Market stability is inherent. Now we don’t see any sign of market instability. So, there cannot be scaremongering. There is no need of panic,” he said.

Mr. Pandey warned investors against financial influencers who were “conning” investors by promising returns on options. He said people must be careful of such “swindlers” who operate through WhatsApp groups, adding that SEBI is monitoring such activities.

Enforcement action is accurate

Last year, SEBI took action against many market manipulators and mis-sellers. Avadhut Sathe, for example, who ran an “unregistered investment advisory” in the name of an academy, and Jane Street, an American hedge fund which allegedly manipulated a significant portion of the options market, were the prominent ones. They were served interim orders and investigations on both the cases are underway. Both have approached the Securities Appellate Tribunals and one of their rationales for this was that the market regulator was charging them of “manipulative intent” when they were just carrying on regular trading/teaching operations.

While Mr. Pandey refused to comment on individual cases that were sub-judice, he expressed confidence that in recent days, SEBI had 80% to 90% success rate in the tribunal cases and much higher rate in the Supreme Court, and that principles of natural justice should apply.

He also responded to criticisms that SEBI was the legislative, executive and the judiciary, that surfaced when enforcement action was taken. He said this was a standard regulatory model all over and any other model would make it impossible to keep up with a fast-paced market.

Focus on bond and commodity market

Mr. Pandey said SEBI was studying the possibilities of rejuvenating the agri-commodities market. “Two working groups were created in agriculture to look at all kinds of problems, which were faced by the commodity side of agriculture. And they have given reports to me (last week), and it will go to committee process,” he said, adding that the proposal to change provisions that have been “static long time” and “making the market inefficient” will be put out for public consultation.

SEBI is also set to focus on deepening the corporate bonds market, he said.

Mr. Pandey said SEBI will study the impact of regulations and make policy writing is more scientific. A committee under the Chief Economic Adviser V. Anantha Nageswaran will meet soon to discuss this, he said.

Published – March 02, 2026 06:01 am IST