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India's SEBI Unveils AI Safeguards Plan
15 Nov
Summary
- SEBI plans detailed guidelines for responsible AI use in capital markets.
- New framework balances innovation with investor protection and market integrity.
- SEBI also enhances cybersecurity framework against growing threats.
The Securities and Exchange Board of India (SEBI) is preparing to issue detailed guidelines for the responsible deployment of Artificial Intelligence (AI) within the capital markets. This initiative, announced by Chairman Tuhin Kanta Pandey, aims to strike a balance between fostering technological innovation and upholding investor protection, market integrity, and financial stability. The proposed framework will introduce safeguards concerning disclosures and accountability for regulated entities, emphasizing a 'human-in-the-loop' approach for critical AI-driven decisions.
SEBI is also bolstering its cybersecurity framework in response to increasing threats targeting financial institutions and cryptocurrency platforms. The regulator has implemented a structured incident response mechanism aligned with international standards. Efforts are underway to enhance cybersecurity infrastructure and assess cryptographic system vulnerabilities, anticipating future challenges like quantum computing risks expected between 2032 and 2035. Furthermore, SEBI is reviewing its regulatory approach to support deep-technology and biotechnology companies in accessing public markets.
