The Securities and Exchange Board of India (SEBI) will strengthen surveillance and enforcement of market manipulators and cyber fraudsters through technology and use artificial intelligence (AI) to expand the reach of its investor awareness programmes, its chairman Tuhin Kanta Pandey said in an interview to The Hindu. He said SEBI was seeking “optimal regulation” in the capital market without “irritating” stakeholders — stock exchanges, investors, brokers — so that “the market functions with integrity”.
The SEBI chief said since he took charge last year, SEBI has launched 58 initiatives to facilitate business processes in the capital market, nine broad initiatives to focus the market on investors and educate investors to make better decisions. SEBI has made four changes to strengthen the framework for regulating market intermediaries such as stock exchanges. It has introduced 13 capital market development measures and six regulations to cool down speculation and stabilize the equity derivatives segment, he said.
Also read | SEBI is cracking the whip on market manipulators
Technology-based initiatives
Many of SEBI’s initiatives have been technology-based, Mr. Pandey said, highlighting the development of SEBI Check, a tool in the UPI interface that identifies registered intermediaries for investors before they make a payment. This tool is expected to curb the fraudulent brokers or traders who promise unreal profits to the investors and cheat them.
The SEBI chief urged investors to be safe and proactive in using these tools to identify cyber fraud. “If anyone approaches, people should say ‘you are a fraud because SEBI check is not mentioned in your account. I will file an FIR against you’,” he said, adding that people must visit their broker’s office or bank branch at least once before investing.
He said SEBI plans to launch campaigns to popularize these tools as part of investor education initiatives. The market regulator has partnered with Bengaluru-based artificial intelligence firm SARVAM to extend the reach of this effort.
“We also did an AI pilot campaign with SARVAM where they reached about 3,85,000 people through calls and these calls were made through an AI process in multiple languages to explain the SEBI Check tool,” he said.
“Disciplined and long-term investing”
Mr Pandey has inherited a correcting stock market in which retail investors may not be able to achieve the returns seen during the post-Covid rally. With markets falling due to continued sell-off by foreign investors and geopolitical uncertainty, he said SEBI’s role is to ensure that there is no major volatility and that some market participants are “not acting very smartly”.
The SEBI chief said that returns depend on multiple factors and profits should not be judged on the basis of only one period. “People have always increased their wealth over a period of time (through) disciplined and long-term investing,” he said, adding that India’s markets are stable and the economy is growing.
Speaking about the widespread speculation in options trading (a derivative instrument used to protect investors against losses in stocks), he said it was limited to short-duration options. As some stakeholders floated many ideas, including curbing “unsuitable” players in the market to ensure stability, Mr. Pandey said there was no sign of instability in the markets. “Market stability is inherent. We don’t see any signs of market instability now. So there can be no scaremongering. There is no need to panic,” he said.
Mr. Pandey warned investors against financial influencers who “cheat” investors by promising returns on options. He said that people must be wary of such “fraudsters” who operate through WhatsApp groups, adding that SEBI is monitoring such activities.
Enforcement measures are accurate
Last year, SEBI cracked down on many market manipulators and mis-sellers. For example, Avadhut Sathe, who ran an “unregistered investment consultancy” on behalf of the academy, and Jane Street, an American hedge fund that allegedly manipulated a significant part of the options market, were prominent. They have been served with preliminary injunctions and investigations are ongoing in both cases. Both went to the Securities Appellate Tribunals and one of their arguments was that the market regulator accused them of “manipulative intent” when they were carrying out normal trading/teaching operations.
While Mr. Pandey declined to comment on individual cases that were sub-judice, he expressed his belief that in recent days SEBI has had an 80% to 90% success rate in court cases and a much higher rate in the Supreme Court and that principles of natural justice should apply.
He also responded to the criticism that SEBI is a legislative, executive and judicial branch that emerged when enforcement action was taken. He said this is a standard regulatory model and any other model would make it impossible to keep up with the rapidly developing market.
Focus on the bond and commodity markets
Mr. Pandey said that SEBI is studying options for rejuvenating the agri-commodity market. “Two agricultural task forces have been set up to deal with all sorts of issues that the commodity side of agriculture has faced. And they reported to me (last week) and it will go to committee,” he said, adding that the proposal to change provisions that have been “static for a long time” and “make the market inefficient” will be put out for public consultation.
SEBI will also focus on deepening the corporate bond market, he said.
Mr. Pandey said SEBI will study the impact of regulations and make policy writing scientific. A committee of Chief Economic Adviser V. Ananth Nageswaran will meet soon to discuss it, he said.
Published – March 2, 2026 06:01 IST
