SEBI arms itself with new software tools for fraud detection

Market regulator Securities and Exchange Board of India (SEBI) is beefing up its investigations and surveillance capabilities through new software tools to detect frauds and bring scamsters to book.

The new software tools would help the market regulator to keep a close watch on market manipulation by monitoring suspicious trades as also by analysing information available in the public domain.

Enhancement of market surveillance capabilities is a core focus area for the market regulator in the current financial year, according to a senior SEBI official.

"Capacity building for effective integrated surveillance, particularly of derivatives market, is essential so as to align with the ever-changing market dynamics.

"During the year, special focus will be laid on enhancement of skill sets for using analytical and statistical tools to facilitate effective surveillance," he said.

SEBI has already made provision for meeting the expenses towards 'software for investigation work and Fraud Intelligence Software', sources said, adding that this project was currently under implementation.

It has already carried out upgradation of its Integrated Market Surveillance System (IMSS), through which it undertakes market surveillance functions and collects data for suspicious market activities through multiple sources.

In due course, SEBI also intends to beef up its data warehousing and business intelligence system (DWBIS), which is used for speedy analysis of data and identification of possible violations like insider trading, sources said.

In the interim, SEBI is carrying out upgradation of its DWIBS tool, while an open-tender process may be adopted in some time for further works in this regard.

SEBI already has a sophisticated surveillance system, which generates at least 100 alerts of suspicious trading activities every day.