New Delhi | Market regulator Securities and Exchange Board of India is strengthening its digital monitoring framework to enhance protection for investors amid rising cyber fraud risks. SEBI Chairman Tuhin Kanta Pandey said that technology-driven vigilance has become essential to curb financial frauds in the growing retail investor ecosystem.
Pandey noted that a large number of new investors are being misled by fake trading applications, WhatsApp investment groups and unrealistic high-return promises. With the rapid expansion of digital financial platforms in India, fraudsters have found new ways to lure investors and divert funds before legitimate investment processes begin.
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He explained that in several cases, investors transfer money directly to fraudsters’ personal accounts even before reaching registered market intermediaries. The objective of the regulator is not only to promote awareness but also to prevent potential financial scams at the very initial stage of investment activity.
The SEBI chief warned that many individuals entering the market are attracted by promises of unusually high returns and often fall into risky financial networks. In such cases, investment decisions are made without proper verification, leading to loss of capital before formal investment procedures are completed. Investors were advised to verify all information from authorised and authenticated sources before committing funds.
Pandey also expressed concern over the growing spread of misleading investment content across social media and digital communication channels. The number of unregistered mobile applications and unauthorised financial advisors has increased significantly. These platforms often attract investors by offering guaranteed return schemes that do not comply with regulatory or legal standards.
The regulator is promoting the use of digital verification tools such as the ‘SEBI Check’ platform, which allows investors to verify the legitimacy of companies, advisors and market intermediaries. Secure transaction mechanisms through authorised platforms and UPI-based payment systems are also being encouraged. Officials believe that technology-based solutions can play a crucial role in preventing financial fraud.
Pandey urged investors to remain cautious about complex and speculative investment products. He said that investing in derivative segments such as futures and options without adequate knowledge carries significant risk. Instead, investors were encouraged to focus on systematic investment plans and long-term investment strategies that promote disciplined capital growth.
The SEBI chief also highlighted that investor education and awareness programmes will be expanded in multi-language and multimedia formats to reach diverse regions across the country. Currently, more than 140 million investors are connected to the market ecosystem in India, making investor protection and transparency increasingly important.
Emphasising the role of technology, Pandey said that artificial intelligence-based surveillance systems are being developed to detect abnormal market activities, flag misleading content and monitor unauthorised investment advice in real time. The regulator believes that a balanced use of modern technology and regulatory enforcement will help safeguard investor interests.
Pandey also indicated that recommendations of a high-level committee on conflict-of-interest issues are under discussion. The matter is expected to be reviewed in the upcoming board meeting. SEBI’s long-term goal is to establish a transparent, secure and trustworthy market system to strengthen retail investor confidence.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
