Protecting investors from unscrupulous traders

SEBI uses SAS® to detect and prevent fraud in India's securities markets

The Securities and Exchange Board of India (SEBI) protects the interests of investors while promoting the development of securities markets. In fact, its role in developing India's capital market boosted investor confidence to a level such that SEBI is perhaps the most important regulator in India.

New regulations and ever-increasing scrutiny of markets underscore the importance of monitoring practices. With more than 200 million transactions a day, SEBI turned to SAS for the surveillance platform and high-performance analytics required to detect and prevent fraud.

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"Our surveillance engine generates alerts on a next-day basis on which our surveillance people work and build their cases," explains Avneesh Pandey, SEBI's General Manager. "From surveillance, we move into deeper investigations."

Investigations rely on substantial amounts of third-party data, including telephone records and more unconventional sources such as print data.

SEBI implemented a comprehensive SAS Business Analytics Platform, including an enterprise data warehouse to bring together and analyze large amounts of data from the exchanges and elsewhere in order to identify potential fraud.

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"We required a full-fledged data warehouse so that this data, which was residing purely from the surveillance point of view, could reach investigations in phase one and our researchers in subsequent phases," Pandey says. "SEBI has always been seen as a proactive regulator, and when we implement a solution of this kind, we live up to that standard – a standard that says, 'Look, somebody is watching you.' That also puts pressure onto the stock exchanges, which are doing their preliminary surveillance, to proactively show that their systems are sharper, quicker and faster, because they do things on a real-time basis."

Using SAS, SEBI anticipates increased convictions and faster adjudication of fraud cases.

"If you really analyze why we are using this system, it is because we are looking to increase our conviction ratios," Pandey says. "With SAS, we are able to mitigate market risk by preventing or stopping unscrupulous players who try to dupe investors by means of unfair trading."