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 platforms.