The Securities and Exchange Board of India (“SEBI”) has issued a SEBI (Intermediaries) (Amendment) Regulations, 2025 (“Amendment, 2025”) to further amend the SEBI (Intermediaries) Regulations, 2008. SEBI has inserted a new chapter on Usage of Artificial Intelligence.
The Amendment, 2025 provides that any person regulated by the SEBI who uses artificial intelligence and machine learning tools and techniques*, either designed by it or procured from third-party technology service providers, irrespective of the scale and scenario of adoption of such tools for conducting its business and servicing its investors, must be solely responsible –
- for the privacy, security and integrity of investors’ and stakeholders’ data including data maintained by it in a fiduciary capacity throughout the processes involved;
- for the output arising from the usage of such tools and techniques it relies upon or deals with; and
- for the compliance with applicable laws in force.
* “artificial intelligence and machine learning tools and techniques” may include any application or software program or executable system or a combination thereof, offered by the person regulated by the Board to investors/stakeholders or used internally by it to facilitate investing and trading or to disseminate investment strategies and advice or to carry out its activities including compliance requirements and the same are portrayed as part of the products offered to the public or under usage for compliance or management or other business purposes.
Source: Securities and Exchange Board of India
