Q1)

Role of SEBI
1. SEBI regulates and monitors the functions of Indian financial market
2. performs functions to protect the interests of the investors and financial institutions
such as checking fraud cases ,prevention of insider trading, promoting fair trade
practices, checking corruption on trade practices and creating awareness among
investors to indulge in fair practices
Need for analytics in SEBI
 Catching fraud cases in the market using only standard tools was getting difficult for
SEBI to control, since the number of fraud cases were increasing day by day.
Increasing regulation and checking on each and every entity required analytics system
to detect malpractices, therefore the need to use analytics came into picture.
 In 2014 at least 70 entities were under the scanner of insider trading in the shares of
Larsen and turbo.
 In another incident top executives of DLF Ltd were banned for indulging in unfair
trade practices.
 Such incidents were increasing day by day and an analysis of such incidents was
impossible without the use of a data warehouse.
 Analytics not only provide faster and better services but also in improves the ease of
doing business.

Q2)
 Due increasing number of fraud incidents which SEBI was not able to analyse without
analytical tools, SEBI with the help of SAS developer their own data warehouse.
 Committed to attention to detail and ensuring market safety, SEBI’s investigators and
analytics group use SAS to analyse market behaviour. To handle data growth and
build a tighter fraud surveillance and investigation platform, SEBI sought a robust
warehouse, high-end analytics, and better predictive modelling and text mining.
 With their data warehouse , SEBI was able to reduce market risk by preventing or
stopping fraud players who try to con investors by means of unfair trading
 SAS utilized its enterprise data integration server for cleansing, standardising, and
removing duplicate data thereby building a single entity view of market participants.
 It collected transaction data from stock exchanges such as NSE,BSE,USE as well as
depositories such as NSDL and CDSL
 The SAS data ware helps detect fraud on a daily, weekly, monthly, fortnightly or
quarterly basis.
 After the implementation of SAS the officials were able to get uniform and formatted
data which helped prevent data inconsistency and better data governance.
 One of the important benefit that SAS provided was to help in increasing conviction
ratio
 SEBI can now establish relationships between market participants and generate more
accurate fraud alerts based on market participants’ behaviour.
Q3)
 Features of SAS analytics used by SEBI for fraud detection and prevention
 The SAS data ware helps detect fraud on a daily, weekly, monthly, fortnightly or
quarterly basis
 After the implementation of SAS the officials were able to get uniform and formatted
data which helped prevent data inconsistency and better data governance
 SEBI collects about 25GB of data per day and project reaching 80GB per day in two
years. With SAS, they can accelerate the process of utilizing this data.
 The SAS Data Quality component cleanses, standardizes and removes duplicate data
to build a single-entity view of market participants.
  SAS Scoring Accelerator the data warehouse processes core statistical and analytic
functions, reducing movement of data and taking advantage of parallel processing. It
also prevents data inconsistency while promoting better data governance.
  SAS Enterprise Miner is used to identify known market manipulation patterns such
as circular trading, pump and dump, insider trading and front running. SAS helps to
identify unknown patterns for investigators to analyse and detect any new market
manipulation patterns, increasing efficiency and effectiveness in market surveillance
and investigation.
Q4)

 Historically, many organizations have relied on manual processes — such as external

audits to detect fraud scams. Unfortunately, these methods of detection are not as
effective as they should because they often rely on sampling, which leaves large
amounts of data unexamined.

 Data analytics now make it possible to examine enormous amounts of data — both
inside and outside an organization — to uncover patterns, relationships, correlations,
anomalies and other insights.

 This technology enables organizations to be proactive in monitoring their activities in

or near real time and spotting high-risk or suspicious activities quickly and cost-
effectively.

 Data analytics helps reveal patterns that would be difficult or even impossible to
detect using conventional methods

 The goal of data analytics is to detect potential fraud by spotting anomalies or

deviations from “normal” behaviour or patterns
  By enabling organizations to be proactive rather than reactive in detecting fraud, data
analytics helps minimize the damage

 For example:

 PayPal uses data analytics to protect its customers against fraud. The company
analyses historical payment data to identify factors that are closely associated with
potential fraud, such as the type of device used, country of origin and certain details
from user profiles. The company uses this information to create machine-learning
algorithms that evaluate each transaction for signs of fraud.

Q5)

SUPERVISED LEARNING UNSUPERVISED LEARNING

 We train the machine using data which is
well "labelled."
 It means some data is already tagged
with the correct answer.
 A supervised learning algorithm learns
from labelled training data, which helps
to predict outcomes for unforeseen data.
 Supervised learning allows you to collect
data or produce a data output from the
previous experience.
 Helps you to optimize performance
criteria using experience
 Supervised machine learning helps you
to solve various types of real-world
computation problems.
 Unsupervised learning is a machine learning
technique, where you do not need to
supervise the model. 
 We need to allow the model to work on its
own to discover information. It mainly deals
with the “unlabelled” data
 It allows us to perform more complex
processing tasks compared to supervised
learning.
 It can be more unpredictable compared with
other natural learning deep learning and
reinforcement learning methods.
 Unsupervised machine learning finds all kind
of unknown patterns in data.
 Unsupervised methods help us to find
features which can be useful for
categorization.
 It is taken place in real time, so all the input
data to be analysed and labelled in the
presence of learners.
 It is easier to get unlabelled data from a
computer than labelled data, which needs
manual intervention.