SEBI To Deploy AI Tools To Combat Fraud And Protect Investors
Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey has announced that the regulator will deploy Artificial Intelligence (AI) tools to safeguard investors’ interests and prevent them from falling prey to fraud.
These tools will help flag fraudsters and con artists posing as legitimate financial advisors who mislead investors. The SEBI chairman was speaking at the Association of National Exchanges Members of India (ANMI) 15th International Capital Market Convention 2026 in Chennai.
Using AI To Detect Fraud
According to Pandey, SEBI is actively making use of internally developed AI tools to protect investors and ensure market integrity. The SEBI Sudarshan system is being used to detect fraudsters on social media posing as registered advisors to mislead investors.
SEBI’s investor survey highlighted the need for greater access to credible information. To address this, the regulator is developing an AI tool to analyse cyber audit reports and identify gaps. This will help SEBI to strengthen its investor awareness and outreach campaigns, which will continue to expand through a multilingual, multimedia, and multi-agency strategy.
Facilities To Prevent Cyber Fraud
Pandey also mentioned that the facilities of validated UPI handles, and the SEBI Check are the first line of defence against cyber fraud. These facilities will help investors to verify the authenticity of financial advisors and prevent them from falling prey to fraud.
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Past Risk and Return Verification Agency (PARRVA)
Pandey also announced that the Past Risk and Return Verification Agency (PARRVA) will provide investors with verified performance data, nudging them towards credible intermediaries and away from finfluencers.
This move is expected to increase transparency in the Indian stock market and help investors make informed decisions. To learn more about how to choose a stock broker, please click here.
Surge In Indian Capital Markets
According to Pandey, India’s capital markets have been surging across equity, derivatives, mutual funds, real estate investment trusts, infrastructure investment trusts, and corporate bonds.
The number of unique investors has surged from 4.3 crore in Fiscal 2020 to 13.7 crore as of today. The first nine months of this financial year have seen 1.7 lakh crore raised through 311 IPOs (Initial Public Offerings), with total equity mobilisation already crossing 3.8 lakh crore.
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Smarter Regulatory Architecture
Pandey also announced that SEBI is building a smarter regulatory architecture, one that streamlines compliance and removes duplication while safeguarding investor protection and market integrity.
This move is expected to increase efficiency in the Indian stock market and help regulators to respond quickly to emerging challenges. To learn more about stock market regulations, please click here.
Conclusion
In conclusion, the deployment of AI tools by SEBI is a significant step towards protecting investors and preventing fraud in the Indian stock market. The use of AI will help SEBI to detect fraudsters and con artists, and provide investors with verified performance data.
As the Indian stock market continues to surge, it is essential for investors to stay informed and up-to-date with the latest news and developments. For more information on stock market news and updates, please visit our website.