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ARTICLE · 07 JULY 2025

SEBI's Consultation Paper And The Winds Of AI Governance

Lakshmikumaran & Sridharan
Lakshmikumaran & Sridharan
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Lakshmikumaran & Sridharan

Lakshmikumaran & Sridharan

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As artificial intelligence and machine learning takes centrestage in many business models and customer-centred activities, regulating them to prevent user harm becomes a key prerogative not just at a legislative but a regulatory level.

IndiaTechnology
Sameer Avasarala
Sameer Avasarala
Aryashree Kunhambu
Aryashree Kunhambu
Author LinkedIn connections

As artificial intelligence and machine learning takes centrestage in many business models and customer-centred activities, regulating them to prevent user harm becomes a key prerogative not just at a legislative but a regulatory level. The absence of a comprehensive legislation on AI, reported reluctance1 to bring in heavy regulatory framework coupled with legislative indications towards light-touch regulation with techno-legal measures2 has resulted in stronger push by sectoral regulators to address concerns arising from AI.

The Securities and Exchange Board of India ('SEBI') has released a consultation paper3 dated 20 June 2025, on the guidelines for responsible usage of AI/ML in Indian Securities Markets ('Consultation Paper') that outlines the background, current regulatory landscape, international best practices, utilization of AI/ML in the market, along with the recommendations of the working group. The Consultation Paper outlines that the current use of

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