Sebi developing AI tool to detect misselling by mutual funds: Chairperson Madhabi Puri Buch

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regulatory aspect of mutual funds, the Sebi chairperson said that as of now mutual funds submit essential data to market regulators periodically concerning compliance, and a ‘nil report’ is considered the best. She added that in the rules-based supervision, there may be some missellings by mutual funds that are going unnoticed for now and artificial intelligence will help to detect the same.

"As we move to use AI to analyze the data, we hope that we will also find the ability to monitor these things (misselling) in the interest of the investors," she said. On the issue of fractional ownership of shares, Madhabi Puri Buch said that Sebi is also keen to introduce that, but it is not allowed under the current legal framework.

"Somebody came with that (idea) and we thought it was good... we would have wanted to welcome them into the innovation sandbox but it is not permitted in the Sebi Act itself.