SEBI using AI for real-time insider trading detection, says Chairman

SEBI Chairman Tuhin Kanta Pandey confirms the use of AI for real-time insider trading detection and monitoring financial influencers. The regulator is also reviewing PMS regulations and working with the RBI on a new corporate bond index.

Stating that Securities and Exchange Board of India (SEBI) is using Artificial Intelligence (AI) 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.

Assessing AI's Role and Future Regulation

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.

Review of Portfolio Management Services (PMS) Regulations

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."

SEBI, RBI Collaborate on Corporate Bond Index

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."

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)