SEBI Considers Developing India-Specific AI Model for Securities Market Regulation

The Securities and Exchange Board of India (SEBI) is exploring the development of an artificial intelligence (AI) model for the securities market that would be built and governed in India.  

Chairman Tuhin Kanta Pandey announced the proposal at the Business Standard BFSI Insight Summit 2026, citing concerns over the confidentiality and availability of advanced AI models. 

Pandey said the model could serve as digital public infrastructure for the securities market. He noted that technology was changing how investors accessed markets and how financial institutions managed their operations. 

SEBI Working on AI Governance 

SEBI is working to implement the International Organization of Securities Commissions (IOSCO) supervisory toolkit for AI use in the Indian securities market. The work covers risk management and the development of a framework for governing AI use. 

Pandey said AI tools could help identify patterns that require further examination. He stressed that their use would depend on reliable data, oversight of models, and clear accountability for decisions. He also said faster, automated processes made institutional judgement more important. 

SEBI is preparing a technology roadmap for market infrastructure institutions (MIIs), which will set out short-term and long-term technology plans for the securities market. 

Cybersecurity Measures and Training 

SEBI has proposed extending the existing information technology and cybersecurity framework for MIIs to their subsidiaries. Pandey said growing dependence on technology providers had made cyber preparedness, business continuity and oversight of outsourced services important for financial market operations. 

The regulator is also planning a training programme with RRU and NISM for engineers managing security operations centres. The programme will train participants to use AI tools to analyse security alerts and develop automated responses. 

Pandey said steps taken by SEBI and other financial sector regulators had strengthened cybersecurity and resilience across financial markets.  

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Conclusion 

SEBI is considering a domestic AI model while working on governance rules, cybersecurity measures, and technology planning. The proposal comes as the regulator examines how AI can be used in market supervision while maintaining oversight and accountability. 

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