How Sebi chief is combating influencers with AI

Market regulator Sebi is deploying artificial intelligence (AI) to curb misleading influencers and strengthen oversight of India's capital markets, Chairman Tuhin Kanta Pandey told Business Today Group Editor Siddharth Zarabi on Monday. 

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"In terms of algos, we have to have the safe entry of any AI devices and with due notifications, disclaimers, and disclosures. AI technology is inevitable. It's being used by us, for example, in curbing influencers, in processing of IPO documents," he said when asked how the regulator is assessing the risk that could emerge from AI-driven trading models. "It's like an agent to help you out."

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Pandey, however, stressed that technology cannot replace responsibility. "There has to be human validation at the end of the day, and there has to be a responsibility that has to be taken. You can't blame it on technology. The responsibility has to be taken by the intermediaries or the person who is using it."

The Sebi chief added that AI regulations will evolve in consultation with industry participants and developers. "Certainly, the guidelines and other regulations in this regard will be a work in progress, and as we discuss them with industry participants and those who are developing these technologies, we will have necessary safety measures also coming in place as we go along."

Asked whether the stricter framework introduced in recent months on derivatives and options is adequate to curb excessive leverage and speculative activity, the Sebi chief cautioned against viewing derivatives as a single category. "We should not really talk in general terms of derivatives because derivatives include a variety of instruments. We have futures where we don't see much problem."

According to him, regulatory intervention was limited to a specific pocket of the market. He said it was only in a very limited portion of options and that two short-dated options where there was high hyperactivity, which the regulator noticed and took measures to curb them. 

"Therefore, it's important to understand that derivative markets are important for liquidity and price discovery - and indeed they are quite integral to cash markets too," he said. 

On whether the steps taken so far are sufficient, Pandey said Sebi would assess their impact before deciding on further action. "But yes, wherever we had the relative problem areas which we identified, there we put out the data, and then the data showed that there was excessive activity. Subsequently, in October 2024 and then in May 2025, we took a series of steps...and after due analysis, we will be able to see whether we need to further intervene in this matter. and if at all in what manner."