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SEBI says detailed AI guidelines for capital markets are coming, with human oversight on critical decisions
Chairman Tuhin Kanta Pandey also said the regulator is inventorying cryptographic systems ahead of quantum computing risks, and pointed to its Sudarshan supervisory tool.
The Securities and Exchange Board of India will soon issue detailed guidelines on the responsible use of artificial intelligence in the capital markets, chairman Tuhin Kanta Pandey said while inaugurating the regulator's 'Bharat Ka Share Bazaar' pavilion at the 45th India International Trade Fair at Bharat Mandapam in New Delhi, which opened on 14 November 2026. PTI, Livemint and The Times of India report that the guidelines will focus on disclosures, accountability of regulated entities and a 'human-in-the-loop' approach so that critical decisions made with AI stay under human oversight.
The rules have been a long time coming. SEBI floated a consultation paper in June 2025 proposing guiding principles for AI and machine learning applications in the securities market. In August 2026, speaking at FICCI's annual markets conference, Pandey told Moneycontrol's reporters that the framework would take a tiered approach and require kill switches, human-in-the-loop controls and data controls, and that every SEBI-regulated entity remains fully responsible for any AI tool it uses, whether built in-house or bought from a third party.
Pandey also spoke about security. He said SEBI introduced a structured cyber incident response mechanism in May, aligned with the Financial Stability Board's FIRE reporting template, amid attacks on financial institutions and crypto platforms and frauds involving social media influencers. On quantum computing, he said SEBI is building an inventory of cryptographic systems to find where they are used and how exposed they are, adding that the risks are expected to become more pronounced around 2032 to 2035 and that markets need to prepare well in advance.
On the supervisory side, Pandey said SEBI has built AI tools of its own, including 'Sudarshan', which is being demonstrated at international regulatory forums. The pavilion itself, set up with NSE, BSE, MCX, CDSL, NSDL and AMFI, includes an AI zone and an investor facilitation camp aimed at warning visitors about fraudulent schemes.
For brokers, advisers, fund houses and fintech platforms that already use AI for advice, surveillance or customer service, the signal is clear: responsibility for model outputs and investor data will sit with the regulated entity, and fully automated critical decisions are unlikely to pass. SEBI has not yet published the final text or a date.
