SEBI Plans India-Made AI Model For Stock Markets

The Securities and Exchange Board of India (SEBI) is considering developing a domestically governed artificial intelligence (AI) model specifically for the securities market, Chairman Tuhin Kanta Pandey said at a media summit.

The proposal aims to address concerns surrounding the confidentiality and availability of advanced AI models while strengthening India's technological capabilities in financial market regulation.

Pandey said the proposed system could serve as digital public infrastructure for the securities market.

SEBI Explores Domestic AI Model And Governance Framework

Highlighting technology's growing influence on financial markets, Pandey said AI could improve investor services, risk assessment and regulatory supervision.

AI-powered systems could also identify unusual patterns requiring closer scrutiny.

However, he emphasised that increased automation must be accompanied by reliable data, effective oversight and clearly defined accountability.

"Using AI will require reliable data, effective model oversight, and clarity about who is accountable for decisions," Pandey said.

He added that faster technological processes made institutional judgement increasingly important.

SEBI is working towards implementing the International Organization of Securities Commissions (IOSCO) supervisory toolkit for AI.

The initiative is intended to strengthen risk management and establish an adaptable governance framework.

The regulator is also preparing a technology roadmap for market infrastructure institutions (MIIs), covering immediate priorities and long-term technological development.

SEBI Strengthens Cybersecurity Oversight And AI Training

Pandey said growing technological interdependence among financial institutions and service providers had increased the importance of cybersecurity, business continuity and oversight of outsourced operations.

To address these risks, SEBI has proposed extending the existing information technology and cybersecurity framework applicable to MIIs to their subsidiaries.

The regulator also plans specialised training in collaboration with RRU and the National Institute of Securities Markets (NISM).

The programme will train engineers managing security operations centres to use AI for analysing alerts, automating responses and improving operational effectiveness.

Pandey acknowledged that regulatory initiatives had improved financial market cybersecurity but stressed the need for continuous cooperation.

He said emerging technological threats required coordinated action across institutions to strengthen resilience.

While AI could improve market efficiency and supervision, effective risk management and institutional accountability would remain essential.