Sebi working on AI tool to curb misselling by mutual funds: Buch

MUMBAI: Markets regulator Sebi is building an artificial intelligence tool to help detect misselling by mutual funds, its Chairperson Madhabi Puri Buch said on Tuesday. She cited a recent incident of a 90-year-old being sold a product with a seven-year lock-in period to illustrate an instance of misselling, and said algorithms will help flag such cases.

“We are working on the question of misselling that may happen by a mutual fund distributor or an agent or by someone who is the responsibility of the mutual fund,” Buch said while speaking at the fourth Global Fintech Fest here.

She admitted that this is a very complex problem requiring intelligence, and added that the algorithm being built will have the essential tools to detect misselling like flagging the case of a 90-year-old being sold the product with a long lock-in period.