SEBI to Issue AI Guidelines for Capital Markets

The Securities and Exchange Board of India will soon issue guidelines for the responsible use of artificial intelligence and machine learning in capital markets. Chairman Tuhin Kanta Pandey announced that the upcoming AI framework will employ a tiered approach incorporating data controls, kill switches, human oversight, and clear accountability. This governance model aligns with the supervisory toolkit of the International Organization of Securities Commissions.

Pandey emphasized that "technology cannot dilute accountability" and stated that regulated entities remain responsible for AI outcomes, data quality, model governance, and cyber resilience. These announcements were made during the second Capital Market Confluence 2026, hosted by the Bombay Stock Exchange Brokers' Forum.

Beyond AI regulation, the regulator expects to release rules regarding the settlement price of derivatives on expiry days within a week following a review of the Closing Auction Session. SEBI also plans to simplify digital onboarding for overseas investors and integrate tender offers, buybacks, and offers for sale into an interoperability framework by November 2026 to lower compliance costs.