The Securities and Exchange Board of India (SEBI), the regulator of India's capital markets, will soon issue detailed guidelines for the responsible use of AI in capital markets. The announcement was made by SEBI chairman Tuhin Kanta Pandey on Saturday, November 14, at the inauguration of the regulator's pavilion at the 45th India International Trade Fair in New Delhi. The guidelines have not been published yet: what exists so far is the chairman's commitment to issue them, with no date announced and no details on penalties for non-compliance.
What the guidelines are expected to cover
According to Pandey, the rules will set safeguards for AI adoption by market participants, built on three pillars: disclosure of AI use, accountability of regulated entities for what their systems do, and a human-in-the-loop approach, under which critical decisions remain under human supervision rather than being left entirely to automated systems. The stated goal is to balance technological innovation with investor protection, market integrity and financial stability.
The context: a global wave of regulation
The initiative follows a consultation paper SEBI published in June 2025, proposing guiding principles for the responsible use of AI and machine-learning applications in securities markets. The Indian announcement comes in the same week that the Philippines created a national AI council by executive order, as Geekiki reported, and Brazil prepares to vote on PL 4675, the big tech regulation bill, on Tuesday, November 17, also covered by Geekiki — signs that governments in different regions are advancing AI governance at the same time.
Cybersecurity, the Sudarshan tool and quantum risks
Pandey also said SEBI has been continuously strengthening its cybersecurity framework, amid cyberattacks on financial institutions and cryptocurrency platforms and digital fraud involving social media influencers. In May 2026, the regulator introduced a structured cyber-incident response mechanism, aligned with the Financial Stability Board's FIRE reporting template. SEBI has also developed AI supervisory tools, including the Sudarshan tool, demonstrated at international regulatory forums.
On quantum computing, the SEBI chairman said the regulator is taking an inventory of cryptographic systems in use to assess vulnerabilities, and that the risks are expected to become more pronounced around 2032–35 — with preparations needing to be completed well in advance. Pandey also said a working group has been formed to make the Innovators Growth Platform, a listing platform for startups, more attractive to deep-tech and biotech companies.
Sources
- The Hindu BusinessLine — SEBI to issue AI norms for capital markets, says Pandey
- Storyboard18 (PTI) — SEBI to issue AI guidelines for capital markets, prioritise investor protection
- Hi India (IANS) — SEBI to issue AI usage guidelines for capital markets
- AI Affairs — SEBI plans AI guidelines for Indian capital markets with human oversight
- Geekiki — Philippines create National AI Council and adopt governance framework
- Geekiki — PL 4675, the big tech bill, is scheduled for a vote on Tuesday (17)
Image: Tuhin Kanta Pandey, chairman of SEBI. Photo by the Securities and Exchange Board of India (SEBI), Government of India, via Wikimedia Commons, licensed under the Government Open Data License – India (GODL-India).
Transparency: this article was produced with the assistance of artificial intelligence, cross-checking public posts on X and sources on the internet. We recommend consulting the original sources cited to confirm the facts.
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