India's markets regulator SEBI weighs domestic AI model for securities trading, chairman says

India’s capital markets regulator is moving to adopt a global supervisory framework for artificial intelligence and is weighing the creation of a domestically governed AI model tailored to the securities market, its chairman said on Wednesday.Providing further details, Chairman Tuhin Kanta Pandey said at a summit in Mumbai that the Securities and Exchange Board of India (SEBI) is rolling out the International Organization of Securities Commissions’ AI supervisory toolkit.

The objective is to reinforce risk management and put in place a flexible governance structure for AI usage in the securities ecosystem. He added that SEBI is also examining the feasibility of a securities market–specific AI model that would be developed and overseen within India as part of the country’s digital public infrastructure. According to Pandey, AI-driven tools have the potential to enhance service delivery, risk evaluation, and regulatory oversight.

However, he stressed that such deployment must rest on dependable data, strong supervision of AI models, and clearly defined responsibility for the decisions they support.Pandey further noted that SEBI is reassessing compliance norms for foreign portfolio investors and will soon publish a consultation paper to gather feedback on bringing these rules closer to international benchmarks. He acknowledged that although India has made it easier for overseas investors by simplifying market access, enabling digital onboarding, and cutting procedural frictions, certain domestic compliance obligations are still stricter than those in many other major markets.

Pandey underlined that India’s growth plans will require both local and overseas capital, and that greater international participation can expand the capital base and introduce additional expertise.He also referred to earlier reporting that SEBI intended to ease disclosure norms for some high-risk offshore funds. Those changes follow criticism and legal challenges that arose after SEBI tightened rules during its probe into offshore investors associated with the Adani Group.

Source: The Economic Times