SEBI eyes AI, machine learning to fix market manipulation

The Securities and Exchange Board of India (SEBI) plans to acquire technology to monitor social media, which, as per the watchdog, is being extensively used for market manipulation.

The regulator has already issued a tender to acquire such technology and also has plans to further augment its analytical capabilities using advanced technology-based tools.

“Social media platforms are increasingly being used by manipulators for market manipulation,” SEBI Chairman Ajay Tyagi said while addressing a conference jointly organised by the regulator and the National Institute of Securities Markets.

“We want to acquire technology and un-structure data analysis because the structured data analysis is not helping much. Manipulators use all sort of things. So, analysis of what is coming in social media, which largely is unstructured data, and language processing is a must to see in addition to pricing volume changes. We intend acquiring that technology,” he said on the sidelines.

The SEBI chief also said that the watchdog had already issued a tender to acquire such technology even as monitoring of social media was already on at the regulatory body in the context of price or volume issues.

Meanwhile, the capital markets regulator has also planned a ‘data lake’ project using tools like machine learning, artificial intelligence and big data analysis among other things.

Data lake refers to a repository of data that is stored in a very raw or unstructured manner.

“Use of advanced technological tools such as artificial intelligence, machine learning, big data analytics, natural language processing etc., that enable collection, filtering and analysis of such unstructured data will greatly augment surveillance capabilities,” Mr. Tyagi said.

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