SEBI to Issue AI Trading Guidelines Amid Rise in Cybersecurity Risks

SEBI Chairman Tuhin Kanta Pandey announced forthcoming guidelines for AI-driven trading, highlighting both opportunities and cybersecurity risks. AI advancements offer automation benefits but also increase vulnerabilities in the financial sector. SEBI focuses on strong regulations and investor protection amid global investment dynamics and unauthorized deposit concerns.

Tuhin Kanta Pandey, Chairman of the Securities and Exchange Board of India (SEBI), announced plans to introduce guidelines for AI-driven trading systems. Speaking at an event organized by the Association of Mutual Funds in India, Pandey emphasized the dual nature of AI as a boon for automation and a potential cybersecurity hazard.

Pandey noted that while AI aids in automating financial processes and expanding investor outreach, it also introduces significant cyber risks. He highlighted the necessity of issuing an advisory to secure SEBI's regulatory ecosystem and mitigate these enhanced risks, which could jeopardize market integrity.

The Chairman also discussed foreign portfolio investor outflows, framing them as part of the natural global investment cycle. Additionally, he addressed unauthorized deposit schemes, urging a focus on regulated financial products. SEBI remains committed to investor protection amidst evolving market conditions.