Sebi working on AI-based processing of IPO documents: Madhabi Puri Buch

The proposed Performance Validation Agency would validate claims related to investment advice.

"We are developing the technology," said capital market regulator Sebi's chairperson Madhabi Puri Buch on August 2 when asked about demystifying prospectus, that is, if it can be auto-cleared without going through exchanges.

Speaking at the FICCI 21st Annual Capital Market Conference, Buch spoke about use of AI for clearing IPO draft prospectus. "We have already implemented Artificial intelligence (AI) for processing public documents, for example the REIT or InvIT annual report," she said.

The Sebi chair also informed that 80 percent of processing work is done through AI. "We are working on AI-based processes of IPO documents but with the assurance of the investor that we have looked through it," she said, adding that by December, they will be out with the first cut.

Buch also spoke about exercising numerous inspections and circulars on corporate papers where she clarified, "My understanding is that we have combined NSE, BSE, depository, Sebi inspections. That was done four or five years ago."

She quipped, "Our regulation keeps pace with innovation, otherwise we will be like policemen in Hindi movies.... where after the hero and villain have finished fighting (we will arrive)... (but) we need to arrive at some point."

Buch also informed that Sebi is in the process of finalising two new innovations - a combo product of rights issue and preferential allotment, along with a demystified offer document.

She said, "One of the innovations you are going to see very soon, that we have a positive response for is a combo product of a rights issue and a preferential allotment."

The entire process, Buch explained, can be finished in 23 days, as compared to a preferential allotment, which listed companies prefer for ease of process, however, which requires more than 40 days to complete.