Stay Alert, Brokers: Sebi Highlights Risks Of Manipulation In Stock Markets

Sebi Whole Time Member Kamlesh Chandra Varshney on Saturday cautioned against manipulations in the capital market and urged brokers to keep a tab and prevent such instances.

Besides, he said that the Securities and Exchange Board of India (Sebi) is using Artificial Intelligence (AI) for investigations.

There is a trend of rising participation of investors in the securities market, which is also expected to contribute significantly to the country’s pursuit to become a developed economy.

Total demat accounts rose to 13.9 crore at the end of December 2023, a growth of 20 per cent in nine months and doubled the number in two-and-half years.

Speaking at an event in the national capital, Varshney emphasised the importance of investor trust and said that if there is no trust of investors, “everything will fail”.

Manipulations are going on and Sebi cannot intervene in all of them. Some brokers are involved and the broker community should keep an eye as “bad elements can come into the system”, he said.

Clamping down on misdoings, the markets watchdog has been taking action against various entities for manipulations, including front-running activities.

At the 13th International Convention of the Association of National Exchanges Members of India (ANMI), he also said that entities should look at technological developments to improve efficiency as well as business.

On the sidelines, in response to a question by PTI on whether Sebi is using AI, Varshney said, “We are using Al for investigations… and also using (it) for a lot of things”.

As long as the market is transparent and no manipulation is happening, that is fine with the regulator, he noted.

The market watchdog will be coming out with a cyber security and cyber resilience framework for the regulated entities.

The framework will be mandatory for the regulated entities Varshney said. ANMI President Vijay Mehta said that last month, over 5.4 million new investors joined the market. The grouping is committed to prioritising sustainability, technology, inclusion, and transparency in the realm of finance and investment, he added.