Synopsis

Sebi is stepping up its use of artificial intelligence to monitor misleading financial advice on social media. Its Project Sudarsan tracks unsolicited advice, while Sebi R(AI)DAR reviews advertisements. The regulator said 62% of investors are influenced by finfluencers, highlighting the need for stronger digital surveillance and investor protection.

Markets regulator Sebi is using artificial intelligence and data analytics to track misleading financial advice on social media, as a new investor survey showed that 62% of investors are influenced by finfluencers. In its annual report, the market regulator said trust in the digital era can no longer be protected only through exchanges, clearing corporations and depositories.

"Data has become a second layer of market infrastructure, making the quality of market data, the integrity of data systems and governance of data use central to investor protection," it said.

The regulator said it has responded by investing in technology and data analytics as core supervisory tools, so that the investor protection framework scales along with the growth of the market.

A key part of this digital push is aimed at unregistered financial influencers, many of whom operate on social media without accountability or verified performance records. Sebi said its latest investor survey showed that 62% of investors are influenced by finfluencers, creating the need for stronger digital vigilance.

Project Sudarsan to track online advice

Sebi said it has launched Project Sudarsan, a tool developed to monitor unsolicited financial advice on social media. It has also rolled out Sebi R(AI)DAR, an AI-enabled platform to review advertisements.

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The regulator said these tools will help it identify unauthorised digital activity and finfluencers who may mislead investors through unverified claims.

The action comes after a sharp rise in retail participation since the pandemic, especially in high-risk areas such as options trading.

Sebi chairman Tuhin Kanta Pandey earlier said that several retail investors were being influenced by such online personalities to enter the risk-prone derivatives market, often through claims that large money can be made from trading. Sebi has already removed more than 1.2 lakh misleading social media posts by unregistered finfluencers and is using AI tools to track violations in the digital space.

Fake apps also under watch

Sebi’s digital investor protection plan also covers payment verification and trading apps. The regulator has introduced Validated UPI handles and the Sebi Check facility, which allow investors to verify in real time whether a payment is going to a genuine Sebi-registered intermediary.

It has also partnered with Google Play for a verified app label initiative. This will give investors a visible signal that a stock trading app belongs to a genuine Sebi-registered broker. The move is aimed at tackling fake trading apps, fraudulent payment requests and impersonation of registered intermediaries.

Pandey had earlier said Sebi’s action against finfluencers is not a heavy-handed crackdown. He described it as a calibrated exercise aimed at identifying problem areas and dealing with them. "Market development is not about a sledgehammer approach but more like a surgeon’s knife — identifying problem areas and dealing with them," he had said.

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