Particle.news

Download on the App Store

Sebi Proposes Draft AI and ML Rules for Indian Securities Market

Public comments close July 11 to shape proposed rules on AI usage in securities trading.

SEBI AI STOCK MARKET

Overview

  • The consultation paper outlines five guiding principles covering model governance, investor disclosures, testing protocols, bias mitigation and data privacy.
  • A Sebi-appointed working group drafted the framework after reviewing existing domestic and international AI/ML guidelines.
  • Market participants will need dedicated teams to audit algorithms, retain model documentation for at least five years and maintain fallback plans for system failures.
  • The draft applies lighter oversight to internal analytics but requires stricter scrutiny and clear disclosures for AI systems that directly impact investors.
  • Sebi plans to finalise the framework later this year, making India one of the first major emerging markets to regulate AI/ML in capital markets.