Market Brief: SEBI Directs AI Push for Market Integrity The Securities and Exchange Board of India (SEBI) is accelerating the integration of Artificial Intelligence to transform market oversight. Chairman Tuhin Kanta Pandey recently confirmed that AI is now a core component of the regulator's enforcement architecture. The strategy focuses on three pillars: strengthening real-time surveillance, improving risk management, and enhancing transparency across the financial ecosystem. Strategic AI Deployment SEBI is currently deploying AI tools to monitor financial influencers, or "finfluencers," to ensure compliance with investment advice regulations. The technology is also being used to scan market advertisements and detect patterns of insider trading in real time. Beyond misconduct, AI is performing audits of cyber security frameworks to proactively identify systemic vulnerabilities. Market Context and Performance As of February 25, 2026, the Indian equity benchmarks showed marginal gains following a period of high volatility. The **Sensex** settled at **82,276.07**, gaining **50.15 points**, while the **Nifty 50** closed at **25,482.35**, up **57.70 points**. Market sentiment has been influenced by global factors, including a **10%** universal tariff implementation in the U.S. and concerns over AI-driven disruption in the IT sector. Sectoral Trends and Growth Growth in the Portfolio Management Services (PMS) industry highlights the need for advanced oversight. Assets under management in the PMS sector rose to **₹10.5 lakh crore** as of January 2026, representing a compound annual growth rate of approximately **17%**. The number of PMS clients has climbed to **2.15 lakh**, marking a nearly **50%** increase since 2022. While technology leads the recovery, sectoral performance remains mixed. The **Nifty Metal** index recently outperformed the broader market, whereas **PSU Banks** and **Realty** sectors have faced downward pressure. Regulatory Evolution The transition toward "SupTech" (Supervisory Technology) is designed to keep pace with an economy where market capitalization has grown fourfold over the last decade to over **₹470 trillion**. India's market cap as a share of GDP has risen from **81%** in 2015 to **138%** today. To manage this scale, SEBI has formed a high-level working group to develop a technology roadmap for Market Infrastructure Institutions, targeting both 5-year and 10-year strategic goals. The shift represents a move from static rules to dynamic, anticipatory supervision. The regulator aims to ensure that as the market attracts more institutional capital, the quality of governance and disclosure remains world-class.