SEBI Wants to Make AI Use in Stock Market Safer

SEBI, the stock market regulator in India, shared new rules on June 20 to make sure AI (Artificial Intelligence) and ML (Machine Learning) are used responsibly in the financial markets. These regulations are intended to protect investors and ensure the security of the markets. SEBI wants to ensure that AI is beneficial while not being risky at the same time.

Why SEBI Is Worried

Currently, AI is being used to provide clarity, estimate damages, monitor customers, and ensure system security. SEBI says that AI can be very helpful, but if not handled properly, it can also create problems. Mistakes or misuse can affect the stability of investors and the stock market.

What SEBI Wants Companies to Do

SEBI suggests that companies using AI should have skilled teams to manage and monitor these tools. These teams should also have plans in place for what to do if something goes wrong with the AI system. Any company that is using AI to directly impact customers should inform them about it.

Testing and Record-Keeping

Before using AI tools live, companies should test them in a separate, safe environment. They should keep an eye on how the equipment performs and maintain a record of input and output data for five years. At the same time, they should adhere to strict regulations for data privacy and cybersecurity.

Final Thought

SEBI wants feedback from the public on these suggestions by July 11. These rules are meant to make sure AI is used in a way that helps everyone and avoids harm. It’s all about being smart and careful with new technology in the financial world.