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Call for Inputs: SEBI's proposed amendments with respect to the use of AI tools
Call for Inputs: SEBI's proposed amendments with respect to the use of AI tools

November 20, 2024

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SEBI has released a consultation paper (November 13, 2024) where it has proposed that regulated market infrastructure institutions (MIIs – this means stock exchanges, depositories & Clearing Corporation) and intermediaries that use AI and ML tools in their securities market and client servicing activities will be held “solely responsible” for the privacy and integrity of the data of investors maintained by them in a fiduciary capacity. SEBI wants to assign responsibility on regulated MIIs and intermediaries that use AI/ML, in the conduct of their business and related activities or while servicing their clients to bring in more seriousness to such users while deploying AI/ML tools and at the same time ensure investors’ protection.

SEBI proposes to amend the following three regulations:

  • Securities and Exchange Board of India (Intermediaries) Regulations, 2008

  • Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018

  • Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018

Through these amendments, broadly, SEBI intends to impose the following obligations:

  • Accountable for Data Integrity: Ensuring the privacy, security, and integrity of investor and stakeholder data, including fiduciary information.

  • Responsible for AI Outcomes: Liable for the consequences of decisions or actions resulting from AI outputs.

  • Obligated to Comply with Laws: Required to adhere to all applicable regulations while using AI.

Should this consultation paper be of interest to you, please reach out to us latest by November 26, 2024. You can write to: sudipto@nasscom.in [+91 9911078936] and ananya@nasscom.in [+91 8971495035].

Given the limited time duration, we would encourage you to contact us over the phone, if that is convenient to you.

Please note that last date for submission of comments to SEBI is November 28, 2024.


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SEBI_Propsoed Amendments_UseofAIML_2024.pdf

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