'Investors must do their own due diligence': SEBI chief
What's the story
The Securities and Exchange Board of India (SEBI) Chairman, Tuhin Kanta Pandey, has stressed the importance of personal due diligence in safeguarding against market risks. This comes as the regulator is deploying advanced tools such as artificial intelligence (AI) to weed out bad actors from the ecosystem. In an exclusive interview marking his first year in office, Pandey said while SEBI provides extensive disclosure frameworks, final decision-making rests with individuals.
Abridged prospectus
Draft abridged prospectus to ease investor navigation
To help investors navigate through the sea of disclosures, SEBI is introducing a "draft abridged prospectus" format. The tool will condense key information and risk factors into an easily accessible document via a QR code. This way, retail participants won't be bogged down by 500-page disclosures while assessing new companies.
AI surveillance
AI in action against finfluencer fraud
SEBI is also using artificial intelligence to tackle the increasing menace of "finfluencer" fraud. Pandey revealed that "SEBI is using AI in a big way to find influencers who are transgressing the line of investment advice and giving advice without being registered." This AI-driven surveillance detects unregistered entities luring retail participants into unregulated accounts or speculative traps.
Market monitoring
Monitoring risk metrics in F&O segment
The focus on protection also extends to the Futures & Options (F&O) segment, where "hyperactivity" in short-dated weekly options has raised alarms. Pandey confirmed that SEBI is currently monitoring data after new risk metrics were implemented in December. He said, "We will continue to monitor this and have the data put it out before suggesting any further measures," indicating a cautious, evidence-based approach to curbing speculative excesses.