The Securities and Exchange Board of India (SEBI) will soon issue detailed guidelines on the responsible use of Artificial Intelligence (AI) in the capital markets, Chairman Tuhin Kanta Pandey has said, according to The Hindu BusinessLine and Zee Business reports.

Source: The Hindu BusinessLine

Pandey was speaking on Saturday, 14 November 2026, at the inauguration of SEBI's pavilion at the 45th India International Trade Fair in New Delhi. He said the proposed guidelines would put suitable guardrails in place while balancing technological innovation with investor protection.

According to the reports, the guardrails will focus on three areas: disclosures about the use of AI, accountability of regulated entities for the AI systems they deploy, and a 'human-in-the-loop' approach so that critical decisions remain subject to human oversight.

The move builds on SEBI's consultation paper, 'Guidelines for Responsible Usage of AI/ML in Indian Securities Markets', issued on 20 June 2025, with comments closing on 11 July 2025. The paper proposed five guiding principles: model governance, investor protection and disclosure, a testing framework, fairness and bias, and data privacy and cyber security measures.

Pandey also said SEBI is reviewing its regulatory framework so that the use of AI by market participants does not compromise investor protection, market safety or integrity. The guidelines have not yet been issued, and the reports do not state what form the final guidelines will take or when they will come into force.

For ordinary investors, no action is needed now. Regulated entities that use AI in areas such as trading, portfolio management, advisory and support services are the ones expected to face the new disclosure and accountability expectations once SEBI publishes the final text.