The Securities and Exchange Board of India (SEBI) has proposed new guidelines to ensure accountability in the use of artificial intelligence (AI) by market infrastructure institutions and intermediaries. This regulatory move is part of SEBI’s broader effort to maintain ethical standards and transparency in the financial markets.
Ensuring Transparency in AI Use
As AI technology becomes increasingly integrated into financial systems, SEBI recognizes the importance of maintaining transparency in its application. The proposed rules aim to ensure that AI usage by market participants aligns with best practices and does not undermine the integrity of the financial ecosystem.
Accountability Measures for Intermediaries
Under the new proposal, market intermediaries, including brokers, exchanges, and custodians, will be required to demonstrate responsible AI use. This includes ensuring that AI algorithms are free from bias, errors, and are properly monitored to prevent market manipulation or unethical practices.
The Need for Ethical AI in Financial Markets
AI’s potential to revolutionize financial markets comes with its own set of challenges. SEBI’s proposal reflects a growing need for accountability in AI-driven decision-making processes, ensuring that these technologies serve the market’s best interests while safeguarding investor trust.
SEBI’s Commitment to Regulation
By introducing these new measures, SEBI reaffirms its commitment to regulating emerging technologies in the financial sector. The proposed rules aim to create a balance between innovation and responsible AI usage to foster growth while maintaining market integrity.
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