AI Adoption Comes with Accountability as SEBI Holds Regulated Entities Responsible

As the adoption of artificial intelligence (AI) and technology in financial markets is growing, the Securities and Exchange Board of India (SEBI)-regulated entities would remain responsible for the tools they use, Chairman Tuhin Kanta Pandey said on Wednesday.

Addressing the 23rd FICCI Capital Markets Conference (CAPAM 2026), Pandey said, "With AI and technology, every SEBI-regulated entity remains fully responsible for any AI or machine learning tool it uses, whether developed in-house or procured from a third party.”

In addition, the SEBI is examining the possibility of introducing an IT resilience index for market infrastructure institutions to provide an objective framework for assessing the resilience of critical systems, according to him.

"We are examining an IT resilience index for market infrastructure institutions to provide an objective framework for assessing the resilience of critical systems," he said.

Pandey further noted that India's next phase of growth would require intelligent use of technology to widen investment opportunities, deepen financing channels and make regulation more future-ready.

He said Sebi's regulatory approach was aimed at ensuring proportionate and forward-looking regulation that supports market growth without compromising investor protection or market integrity.

Pandey said India's financialisation needs to become deeper and broader and said that mutual funds and systematic investment plans have brought more households into market-linked investments and strengthened domestic market resilience. At the same time, he said significant scope remains to expand participation in capital markets.

“India's capital markets have transformed and are no longer merely a barometer of economic activity. They are an important driver of it,” Pandey said.

Pandey also said a growing economy would create new investment frontiers and highlighted the need to build markets that are deeper and more innovative while remaining fair, safe and trusted.

“The central question: How do we build markets that are deeper and more innovative, yet fairer, safer, and more trusted?” he said.