Sebi’s technology bet: To hire agency to implement data analytics project to track market manipulations

Betting big on technology, Sebi is looking to hire an agency to implement a “data analytics project”, through which the watchdog also wants to track possible market manipulations such as insider trading and front running. The move is part of Sebi’s effort to address and handle challenges arising out of technological advancements in the markets. In a notice, the regulator has invited expression of interest (EoI) from “reputed and reliable solution providers for implementation of data analytics project and building of data models at Sebi”.

The analytics/model development would include developing new models, implementing analytics project, establishing linkages between various entities in the market, automated extraction of details from documents filed with Sebi and prediction of market manipulations such as insider trading and front running. Spelling out the eligibility criteria, the markets regulator said that the bidding company should have been in operation for at least 3 years and should have successfully implemented similar projects of analytical model development, preferably for a regulatory body or a banking and financial institution. Among others qualification, the interested party should be ‘fit and proper’ as it should not be a blacklisted firm due to unsatisfactory performance, breach of instructions, corrupt or fraudulent or any other unethical business practices, Sebi said.

Also, it should have adequate manpower with experience in the technical skills and engaged in analytical model development since last three years. The interested bidders need to submit their applications by December 20, the Securities and Exchange Board of India (Sebi) said. Recently, Sebi Chairman Ajay Tyagi announced that the regulator plans to spend Rs 500 crore on information technology in the next five years as well as have a “data lake project”.

The project is aimed at augmenting analytical capability at Sebi with advance analytical tools such as artificial intelligence and machine learning, deep learning, big data analytics, pattern recognition, processing of structured and unstructured data, text mining and natural language processing, among others. Besides, the regulator, in its annual report for 2018-19, said that it intends to deploy data analytics and new generation technologies to deal with various challenges in the market.

As per the report, the regulator would continue to strengthen market supervision through steps such as technology solutions being built to achieve the objective of identifying non-compliance and assisting in investigations.