**SEBI Introduces New Alert System to Detect Market Manipulation**
*By Akash Pandey | Oct 12, 2025, 11:17 AM*
The Securities and Exchange Board of India (SEBI) has launched new rule-based alert tools aimed at detecting market manipulation more effectively. This initiative is part of SEBI’s broader goal to enhance its market surveillance capabilities.
### Strategic Transition: From Reactive Supervision to Predictive Oversight
SEBI Chairman Tuhin Kanta Pandey announced this development during the BSE Brokers’ Forum’s Capital Market Confluence. He highlighted that SEBI is shifting from a reactive approach to a predictive oversight model. The regulator has revamped its data warehouse system and introduced new role-based alerts.
These alerts are specifically designed to identify suspicious activities such as pump-and-dump schemes and fraudulent trades in bulk deals. The enhanced system will enable SEBI to spot potential market manipulation early, preventing widespread impact.
Additionally, SEBI is considering implementing a “safety net” framework for depository participants, similar to the one for stockbrokers, to ensure uninterrupted operations during technical outages.
### KYC Innovation: Video-Based Verification for NRIs
In a bid to simplify the verification process, SEBI is testing a video-based Know Your Customer (KYC) system in collaboration with the Unique Identification Authority of India (UIDAI) and the Reserve Bank of India (RBI). This new system will allow Non-Resident Indians (NRIs) to complete KYC verification remotely without needing to visit India.
Chairman Pandey emphasized the urgency of providing NRIs with easy and secure access to KYC procedures, which will encourage greater NRI participation in India’s securities market.
### Digital Focus: Enhancing Resilience and Data-Driven Supervision
With the growth of algorithmic and high-frequency trading, SEBI is placing increased emphasis on digital resilience and data-driven supervision. The regulator plans to continuously update its frameworks to ensure fair and transparent operations in these complex trading segments.
Pandey also noted the importance of deepening the cash equity segment, which has nearly doubled to over ₹1 lakh crore in the past three years.
### Regulatory Actions: Streamlining FPI Registration and Short-Term Derivatives Oversight
On the regulatory front, SEBI has introduced several measures following detailed analysis of index options related to short-term derivatives trading. To further streamline processes, SEBI is set to digitize and simplify the Foreign Portfolio Investor (FPI) registration through its SWAGAT-FI platform.
The new digital registration process aims for faster onboarding and reduced compliance burdens for trusted investors, making FPI registration simpler, quicker, and more efficient.
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SEBI’s latest initiatives reflect its commitment to leveraging technology for market integrity, investor protection, and enhanced regulatory efficiency.
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