The Securities and Exchange Board of India (SEBI) has removed over 1.2 lakh misleading posts made by unregistered financial influencers (“finfluencers”) on digital platforms.
The regulator achieved this using its AI-powered surveillance tool named “Sudarshan”, which helps detect violations related to unauthorised financial advice and misleading investment claims circulating on social media.
AI-Powered Surveillance Through ‘Sudarshan’
To strengthen regulatory oversight in the digital ecosystem, SEBI deployed an in-house Artificial Intelligence (AI) system called “Sudarshan.”
Key Features of Sudarshan
| Feature | Details |
| Tool Name | Sudarshan |
| Developed By | SEBI |
| Purpose | Detect misleading financial content and unregistered advisory activity |
| Content Monitored | Audio, video, and text across digital platforms |
| Capability | Multilingual content tracking |
| Surveillance Method | AI-based pattern detection and automated monitoring |
The tool scans large volumes of digital content and identifies patterns indicating potential violations of securities regulations.
Unlike traditional complaint-based monitoring, Sudarshan proactively flags suspicious narratives and financial claims.
Action Against Misleading Finfluencer Content
Using Sudarshan, SEBI has:
- Detected misleading investment advice
- Identified unregistered financial advisors
- Flagged false claims of guaranteed profits
- Directed digital platforms to remove over 1.2 lakh posts
These actions aim to protect investors from misleading information circulating on social media.
Financial Education vs Investment Advice
SEBI has clarified the distinction between financial education and investment advice.
| Category | Explanation |
| Financial Education | Individuals can freely share general financial knowledge under freedom of expression |
| Investment Advice | Requires SEBI registration and regulatory compliance |
SEBI intervenes when influencers:
- Offer investment advice without registration
- Make unsubstantiated profit guarantees
- Mislead investors with false claims
Once violations are detected, the regulator instructs platforms to remove such content.
Retail Derivatives Trading Under Watch
SEBI has also cautioned retail investors about the high risks associated with derivatives trading, particularly options trading. SEBI has raised concerns about social media narratives encouraging easy profits in derivatives trading.
After the pandemic, there has been a significant increase in retail participation in derivatives markets. However, SEBI’s analysis revealed that:
- A majority of small investors incur losses in options trading.
Statutory Risk Warning
To improve investor awareness, SEBI introduced mandatory risk disclosures in derivatives trading.
Key Warning: “Nine out of ten retail investors lose money in options trading.”
This statutory warning is intended to ensure investors clearly understand the risks before participating in derivatives markets.
SEBI’s Approach to Market Development
SEBI emphasises a calibrated regulatory approach, balancing:
- Market growth
- Investor protection
- Technological surveillance
- Responsible financial communication
The use of AI-driven monitoring tools represents a step toward modernising regulatory oversight in digital financial ecosystems.