Chennai: Market regulator Securities and Exchange Board of India (SEBI) on Friday said it has extensively deployed artificial intelligence (AI) capabilities, with the technology generating a growing number of actionable alerts. These alerts have helped uncover patterns indicating instances of front-running in the portfolio management services (PMS) industry.“Recently, we have noticed our AI generating enough alerts, and over a period of time, the patterns emerging from those alerts suggest that a certain amount of front-running is also happening in the PMS industry. We always believed this was something largely confined to the mutual fund space. But of late, we have observed that it is happening in PMS as well. We are analysing how it has impacted investors,” Manoj Kumar, executive director of SEBI said at the Association of Portfolio Managers in India’s (APMI) PMS Leadership Conclave 2026 in Chennai.He added that the regulator is adopting a “handholding” approach towards compliance and resolution. “We always see that when you operate, there can be some unintended violations. As long as these violations remain unintended, we are very, very accommodative. We will listen to your viewpoint,” Kumar said.However, he stressed that the objective was to create greater awareness within the PMS industry and discourage any activity that could be perceived as even “remotely” impermissible or viewed negatively by investors. Drawing on his experience, he said that anyone who chose to engage in such practices would, sooner rather than later, invite regulatory scrutiny and enforcement.Kumar said SEBI has initiated a revamp of the regulatory framework for the PMS industry, with a consultation paper expected soon. “The intent is to facilitate your active participation under the licence. You will see several changes aimed at making the regulations easier to understand and improving ease of doing business,” he said.Speaking to TOI on the sidelines of the conclave, APMI chairman Biharilal Deora said the review would support the industry’s growth. “The regulations were last comprehensively reviewed in 2020 after the original framework introduced in 1993. They are now being reviewed again within a much shorter period,” he said.The PMS industry’s assets under management (AUM) currently stand at Rs 42.5 lakh crore and are expected to grow significantly in the coming years.
