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

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 used more and more by us. We are using it against financial influencers and those who cross the boundaries of investment advice. It is also being used in certain advertisements to ensure they are covered by Sebi rules,” Pandey said.

The comments indicate increased tech-driven scrutiny as markets deepen and retail participation increases.Speaking at the PMS conclave, Pandey underlined that while Indian capital markets are growing rapidly, regulation must keep pace with complexity and scale. In the portfolio management services sector alone, assets under management have increased from around Rs 5 lakh crore in FY21 to Rs 10.5 lakh crore by January 2026, reflecting a compound annual growth rate of around 17%. The number of PMS customers has also increased to around 2.15 lakh, up almost 50% from 2022.

Against this backdrop of growth, Sebi has emphasized on stronger supervision, transparency and investor protection. Pandey said the regulator’s approach has been one of optimal regulation, reducing unnecessary friction while strengthening safeguards for investors.

Sebi has streamlined digital onboarding, simplified disclosure norms and strengthened performance reporting standards in PMS. It has also increased transparency through mandatory disclosure of cost calculations and improved the visibility of complaint data to investors.

The growing use of AI marks the next step in that surveillance evolution. The regulator supervises financial influencers, also known as finfluencers, who provide stock tips and investment advice on social media platforms. Using AI-based tools, Sebi aims to identify patterns of potential misconduct, including unregistered advisory activities and coordinated misinformation that could disrupt markets.

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

In his address, Pandey emphasized that governance standards need to increase with scale, especially for entities managing concentrated, high-stakes portfolios. He emphasized the need for strong internal controls, clear separation of business functions and disciplined documentation.

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