Sebi deploying AI to track influencers and insider trading in real time: Tuhin Kanta Pandey

Synopsis

Sebi Chairman Tuhin Kanta Pandey said the regulator is increasingly using artificial intelligence tools to monitor market misconduct, including insider trading, unregistered investment advice, and misleading financial promotions.

Sebi Chairman Tuhin Kanta Pandey said the regulator is increasingly using artificial intelligence tools to monitor market misconduct, including insider trading, unregistered investment advice, and misleading financial promotions.

"AI is being increasingly used by us. We are using them on financial influencers and those transgressing the lines of investment advice. It is also being used on certain advertisements to ensure they are under Sebi rules," Pandey said.

The remarks signal a sharper tech-driven surveillance push as markets deepen and retail participation rises.

Speaking at the PMS Conclave, Pandey underlined that while India's capital markets are expanding rapidly, regulation must keep pace with complexity and scale. The portfolio management services industry alone has seen assets under management rise from about Rs 5 lakh crore in FY21 to Rs 10.5 lakh crore as of January 2026, reflecting a compound annual growth rate of around 17%. The number of PMS clients has also climbed to about 2.15 lakh, up nearly 50% from 2022.

Against this backdrop of growth, Sebi has emphasised stronger oversight, transparency and investor protection. Pandey said the regulator's approach has been one of optimum regulation, reducing unnecessary friction while tightening investor safeguards.

Sebi has streamlined digital onboarding, simplified disclosure norms and strengthened performance reporting standards in PMS. It has also enhanced transparency through mandatory fee calculation disclosures and improved grievance data visibility for investors.

The growing use of AI marks the next step in that supervisory evolution.

The regulator has been monitoring financial influencers, commonly referred to as finfluencers, who provide stock tips and investment advice on social media platforms. By using AI-based tools, Sebi aims to identify patterns of potential misconduct, including unregistered advisory activity and coordinated misinformation that could distort markets.

Pandey also said AI tools are being deployed to scan advertisements to ensure compliance with Sebi norms. This comes amid concerns that promotional material for investment products sometimes blurs the line between marketing and advisory services.

In his address, Pandey stressed that governance standards must rise with scale, especially for entities managing concentrated, high-stakes portfolios. He highlighted the need for strong internal controls, clear segregation of business functions and disciplined documentation.

He also cautioned firms to use technology responsibly, audit their service providers and maintain robust data privacy and business continuity safeguards.

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