Artificial Intelligence1 min read

Sebi to issue AI guidelines for capital markets soon, focus on investor protection and human oversight

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In short

SEBI Chairman Tuhin Kanta Pandey detailed the impending framework while addressing technological risks at the 45th India International Trade Fair 2026. The regulatory initiative prioritizes market stability through mandatory disclosures, firm liability, and a human-in-the-loop requirement for critical operations. Beyond artificial intelligence, the watchdog has instituted broader defensive steps, including auditing cryptographic mechanisms to counter quantum computing risks anticipated between 2032 and 2035. Concurrently, an internal working group is revamping the Innovators Growth Platform to better accommodate deep-tech and biotechnology startups facing extended gestation periods.

Key points

  • Market entities will face mandatory disclosure rules and legal accountability for artific…: Market entities will face mandatory disclosure rules and legal accountability for artificial intelligence deployments in capital markets.
  • Internal surveillance is being strengthened through proprietary supervisory tools such as…: Internal surveillance is being strengthened through proprietary supervisory tools such as Sudarshan alongside upgraded cybersecurity protocols.
  • The Innovators Growth Platform is undergoing an official review to improve capital access…: The Innovators Growth Platform is undergoing an official review to improve capital access for deep-technology and biotechnology firms.

Sources checked by our analysis pipeline: 1

The Securities and Exchange Board of India (SEBI) will soon issue detailed guidelines for the responsible use of Artificial Intelligence (AI) in the capital markets, Chairman Tuhin Kanta Pandey said on Saturday. The proposed framework will seek to balance technological innovation with investor protection, market integrity and financial stability.

Pandey said the guidelines would establish safeguards governing the use of AI by market participants. Key provisions are expected to cover disclosures, accountability of regulated entities and a 'human-in-the-loop' approach, ensuring that critical decisions involving AI systems remain subject to human oversight.

The regulator had floated a consultation paper in June 2025, proposing guiding principles for the responsible use of Artificial Intelligence and Machine Learning (AI/ML) applications and models in the securities market.

The proposed principles aim to maximise the benefits of AI adoption while minimising potential risks to investors and the broader financial system.

Speaking at the inauguration of SEBI's pavilion at the 45th India International Trade Fair (IITF) 2026, organised by the India Trade Promotion Organisation (ITPO), Pandey highlighted the growing threat of cyberattacks targeting financial institutions and cryptocurrency…

Artificial Intelligence