SEBI introduces new alert system to detect market manipulation
What's the story
The Securities and Exchange Board of India (SEBI) has introduced new rule-based alert tools to detect market manipulation. The move comes as part of the regulator's efforts to strengthen its market surveillance. Tuhin Kanta Pandey, SEBI's chairman, announced this development at the BSE Brokers's Forum's Capital Market Confluence on Saturday.
Strategic transition
From reactive supervision to predictive oversight
Pandey said SEBI is moving from reactive supervision to predictive oversight. He added that the regulator has revamped its data warehouse system and developed new role-based alerts. These alerts are designed to identify pump-and-dump patterns and detect fraudulent trades in bulk deals. The move is aimed at helping SEBI detect potential market manipulation before it spreads widely. SEBI is considering a "safety net" framework for depository participants, similar to what exists for stockbrokers, to ensure operational continuity during outages.
KYC innovation
Video-based KYC for NRIs
SEBI is also testing a video-based know-your-customer (KYC) system in consultation with the Unique Identification Authority of India (UIDAI) and the Reserve Bank of India (RBI). The new system will allow non-resident Indians (NRIs) to complete verification remotely, without coming to India. Pandey said that establishing an easy and secure KYC access for NRIs is an urgent goal for SEBI to facilitate their participation in the securities market.
Digital focus
Focus on digital resilience, data-driven supervision
Pandey said SEBI's focus will increasingly be on digital resilience and data-driven supervision, especially with rising algorithmic and high-frequency trading volumes. The regulator plans to continuously update its framework for fair and transparent operations in such trades. He also emphasized the need to deepen the cash equity segment, which has nearly doubled to over ₹1 lakh crore in the last three years.
Regulatory actions
Streamlining the FPI registration process
On the short-term derivatives front, SEBI has introduced several regulatory measures after detailed data analysis of index options. The regulator also plans to digitize and streamline the foreign portfolio investor (FPI) registration process under its SWAGAT-FI framework. Pandey said this would offer faster onboarding and lighter compliance for trusted investors, making FPI registration a simple, fast, digital process.