SEBI to Leverage AI For Processing 1,000 IPO in Next 2 Years

The capital market regulator, Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch stated that it is utilising artificial intelligence (AI) to transform the way it processes initial public offering (IPO) documents during her address at the Association of Investment Bankers of India (AIBI) Annual Convention.

Buch added that SEBI is in the advanced stages of creating a standardised IPO template. This new approach is designed to simplify the filing process for both issuers and merchant bankers. The template adopts a “fill-in-the-blanks” structure, where anything outside the standard format will be flagged for exception reporting. This differentiation between standard and exceptional content aims to streamline both document preparation and regulatory review.

Anticipated Impact on IPO Workload

With projections indicating that 1,000 IPOs are expected in the next 2 years, Buch emphasised that this initiative will significantly reduce the workload for issuers and SEBI alike. By focusing regulatory scrutiny on exceptional items, the new system is designed to improve efficiency and shorten the time taken for document preparation and review.

The proposed system introduces an exception reporting mechanism, allowing IPO documents to be viewed in two parts: standard and exceptional. This division enables officers to concentrate their attention on areas that deviate from the norm, making it easier to identify discrepancies and take appropriate action, thus speeding up the overall review process.

AI Integration to Support IPO Document Processing

Buch also discussed SEBI’s use of publicly available AI tools to further enhance IPO document processing. These AI tools assist in three key areas:

1. Document Analysis: AI scans IPO submissions to ensure they comply with regulatory standards and highlights relevant pages for officer review.
2. External Scanning: The AI searches the internet and social media for mentions of the company and its key personnel, identifying potential red flags or undisclosed news.
3. Document Tallying: The AI cross-references the contents of the document, ensuring internal consistency, a task that was previously handled manually by officers.

Conclusion

As SEBI prepares for a surge in IPO filings, this technological shift is expected to significantly improve the efficiency of document processing. With the projection of up to 1,000 IPOs over the next 2 years, Buch expressed confidence that these advancements will help SEBI meet the growing demand and enhance the regulatory review process.

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