Key Details
The SEBI Annual Report 2025–26 shows investor protection moving beyond complaint resolution towards safeguards covering the full digital investment journey — from encountering financial content to verifying an intermediary and making a payment.
Regulatory Layer | Development and its Purpose |
|---|---|
Payment verification | Investor-facing intermediaries must accept individual payments through validated “@valid” UPI handles. SEBI Check allows investors to verify a recipient’s UPI ID or bank account. |
Trading applications | Genuine applications of SEBI-registered stockbrokers can display a Verified label on Google Play, helping users identify imitation apps. |
Digital advertising | An API-based system allows participating social-media platforms to check whether securities-market advertisers are registered with SEBI. |
Online surveillance | Project SUDARSAN uses AI to scan public content for impersonation, guaranteed-return claims and unregistered investment advice. |
Mutual-fund communications | R(AI)DAR reviews advertisements and investor-education material produced by asset management companies. |
Performance claims | PaRRVA independently verifies specified risk-and-return claims made by investment advisers, research analysts and algorithmic-trading providers. |
Secure communication | Regulated entities have been directed to use the designated 1600 telephone-number series for service and transactional calls. |
Account protection | A voluntary debit-freeze facility allows investors to prevent unauthorised debits from demat and non-demat mutual-fund folios. |
Investor grievances | SCORES received 61,788 complaints and disposed of 60,213 during 2025–26, although pending actionable complaints increased to 5,637. |
Investor Protection Is Moving Closer to the Transaction
The SEBI Chairman's Statement highlights a shift from post-fraud enforcement towards preventive investor protection, recognising that digital investment fraud often begins through social media, impersonation, fake trading applications or fraudulent payment requests.
SEBI's emerging framework introduces safeguards across the investment journey:
Discovery: verification of online advertisements and monitoring of public content;
Assessment: validation of intermediary registration and performance claims;
Access: verified labels for genuine stockbroker applications;
Payment: authenticated UPI handles and recipient verification;
Account security: mechanisms to block unauthorised debits; and
Redressal: SCORES and online dispute-resolution systems.
The Chairman noted that 62% of investors are influenced by financial influencers, highlighting the growing importance of regulating digital channels through which investment decisions originate.
AI Is Expanding Market Surveillance, Not Replacing Enforcement
Project SUDARSAN uses multimodal AI to analyse text, speech, images and regional-language content for indicators of securities-related fraud, including:
guaranteed-return claims;
impersonation of regulated entities;
fraudulent certifications; and
unregistered investment advice.
Since becoming operational in November 2025, it has identified over 20,000 potentially fraudulent posts.
R(AI)DAR, developed for AMFI, performs automated compliance screening of mutual fund advertisements and investor-awareness material.
The report emphasises that AI-generated alerts support surveillance rather than establish violations. During 2025–26, SEBI initiated 402 investigations and completed 338, with enforcement continuing through due process.
Verification Tools Reduce Information Asymmetry
Alongside surveillance, SEBI is introducing verification tools that help investors distinguish genuine market participants from impersonators.
These include validated UPI handles, SEBI Check, verified stockbroker applications and PaRRVA, which enables verification of specified historical performance claims made by investment advisers, research analysts and algorithmic-trading providers.
Together, these measures shift part of the burden of fraud detection from individual investors towards verified regulatory identity and authenticated information.
Financial Literacy Remains Central to Investor Protection
The Investor Survey 2025, covering over 90,000 households, found that while 63% of households were aware of at least one securities product, only 9.5% participated in securities markets.
The survey also found that:
74% of non-investors cited complexity or lack of understanding;
51% reported low trust in financial institutions; and
47% preferred financial education in regional languages.
Alongside regulatory reforms, SEBI expanded investor education through SMARTs programmes, regional awareness initiatives and an AI-assisted payment-verification campaign reaching 3.6 lakh investors.
What Is Supervisory Technology?
Supervisory technology, or SupTech, refers to digital tools used by regulators to analyse information, monitor compliance and identify activity requiring closer examination. It expands supervisory capacity but does not replace investigation, human judgement or legal proceedings.
Policy Relevance
Investor protection is becoming part of transaction infrastructure, with verification introduced before applications are downloaded or payments completed.
Platform cooperation now supports securities regulation: Payment systems, app stores and social-media platforms influence whether safeguards work in practice.
AI can expand monitoring across languages and formats, but requires auditable alerts, human review and transparent escalation standards.
Interoperable verification is important: Investors should be able to recognise regulatory identity consistently across applications, advertisements, calls and payment channels.
Success should be assessed through outcomes: Relevant measures include prevented payment diversion, removal of fraudulent content, investigation turnaround, investor losses and complaint resolution—not only material scanned.
Pending grievances require attention: Growth in actionable complaints awaiting resolution shows that preventive technology must be matched by adequate redressal capacity.
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