SEBI Discussion Paper on Responsible AI/ML in Securities Markets
Why in the news
SEBI sought views on rules for AI and machine learning in markets as automated trading grows.
Key facts
- AI adds no brand-new risks but can amplify manipulation, flash crashes, contagion and bias.
- Aims: investor protection and financial stability.
- Entities would reveal AI systems, data sources, purpose and decision logic.
| Proposal | Gist |
|---|---|
| Governance | Testing, audits, explainable decisions |
| Fairness and privacy | Curb bias, protect data |
| Oversight | Humans supervise, with agentic AI ahead |
Implications
Firms must revisit AI governance and compliance reporting; fintechs face scrutiny; investors may get more transparent tools.
Exam angle
- Stage: discussion paper by SEBI.
- Related terms: agentic AI, algorithmic trading, flash crash.