Introduction
Artificial Intelligence (AI) and Machine Learning (ML) are
changing the India securities market from how things operate,
influencing various facets including trading algorithms, portfolio
analysis, compliance checks, and investor services. These
improvements have enhanced decision-making processes, elevated
market efficiency, and increased liquidity. However, they also pose
some complex regulatory challenges like algorithmic transparency,
systemic vulnerabilities, and the risk of market manipulation
highlighting the urgent need for regulatory frameworks that is at
par with the technological advancements.
In response, the Securities and Exchange Board of India (SEBI)
introduced an innovative approach by establishing a thorough AI and
ML reporting framework in 2019. The purpose was not to limit
technological innovation, but to assure that the use of AI and ML
by intermediaries is verifiable, and in line with the principles of
market integrity. Over
