SEBI Has Started Using AI For IPO Documents Processing: Madhabi Puri Buch

SUMMARY

SEBI is leveraging AI to scrutinise annual reports like REIT and InvIT, said SEBI chief

While SEBI officers validate those reports and do some manual checks, 80% of the work is done by AI

The market regulator is also coming up with a new institution called the performance validation agency to validate claims related to investment advice

Market regulator Securities and Exchange Board of India (SEBI) has started leveraging the power of artificial intelligence (AI) for the processing of initial public offering (IPO) documents.

Speaking at the FICCI 21st Annual Capital Markets Conference, SEBI chairperson Madhabi Puri Buch said, “We have already implemented artificial intelligence within SEBI for processing public documents.”

“For instance, let’s say a REIT annual report or InvIT annual report, earlier what a human being used to read and see whether the annual report is in compliance with our norms, etc, (but) now AI does that. The (SEBI) officer validates it and also does some manual checks, but 80% of the work is done through AI,” said Buch.

The SEBI chief spoke about the usage of AI when asked about demystified prospectus and their auto-clearance without going through scrutiny. She added that AI-based processing of IPO documents will naturally fast-track the process.

The development comes at a time when the usage of AI has leapfrogged at enterprises and new-age businesses across sectors, particularly with GenAI making business processes more seamless and increasing productivity at a lowered time.

In fact, Buch also stressed the importance of leveraging technology and innovation.

“The theme of technology, which is underlying the entire country today, will continue to drive SEBI and I would urge that all the market participants adopt Regtech, because we are rapidly adopting Suptech. A lot of the supervision we now do, and it’s not just market surveillance, it’s inspection, and all of that, is now using technology,” said Buch.

The SEBI chief also urged companies to proactively start adopting innovation and technology.

“If you have to be proactive and know what’s happening in your setup before we get to know… If you don’t have the technology, you will be surprised by what we dig up,” she said, pointing at the compliances required during the IPO processes.

Meanwhile, as per Buch, SEBI is also trying an innovation in the organisation, a new institution called the performance validation agency to validate claims related to investment advice.

SEBI’s initiatives to lower the time taken in the processing of IPO documents come at a time when more new-age tech companies are preparing to go public. This year more than 10 startups are set to go public, including names like Ola Electric, FirstCry, and Swiggy while the likes of ixigo and Awfis have already got listed.