The Securities and Exchange Board of India (SEBI) is creating a dedicated artificial intelligence (AI) model to analyse corporate filings and quarterly results to flag potential financial manipulation and misstatements. The initiative was disclosed by SEBI whole-time member Kamlesh Chandra Varshney at a recent capital markets conference organised by the Federation of Indian Chambers of Commerce and Industry (FICCI). The regulator has assembled a team to develop the system, aiming to detect violations without relying solely on investor complaints, according to medianama.com.
This AI model will expand SEBI's current use of AI beyond trading data surveillance. SEBI already employs internally developed AI systems to generate alerts for trading-related violations, aiding enforcement investigations. Additionally, SEBI uses AI to monitor financial fraud on social media through Project SUDARSAN, operational since November 2025, which scans publicly available content for fraudulent material using multimodal AI analysing speech, visuals, and context. By 2025-26, SUDARSAN identified over 20,000 instances of fraudulent content, as reported by medianama.com.
The new AI initiative is part of SEBI's broader strategy to enhance regulatory oversight using technology. The regulator has also deployed R(AI)DAR to review mutual fund advertisements and investor education materials, flagging issues like missing disclosures. This move aligns with global trends where financial regulators increasingly use AI tools to detect irregularities and enforce compliance, potentially improving market transparency and investor protection.
SEBI's AI system for corporate filings is currently under development, with no announced launch date. The regulator's ongoing projects, including SUDARSAN and R(AI)DAR, demonstrate its commitment to integrating AI into enforcement mechanisms, marking a notable shift in how regulatory bodies monitor financial markets in India.