- SEBI Chairman Tuhin Kanta Pandey highlighted agentic AI's impact on India's securities markets
- Agentic AI offers efficiency but raises concerns on oversight and accountability
- SEBI stresses technology can be outsourced but accountability cannot be delegated
The rise of agentic artificial intelligence (AI) could reshape the way India's securities markets operate, but the bigger challenge for regulators will be ensuring that technology deployed at scale does not create gaps in accountability, SEBI Chairman Tuhin Kanta Pandey said.
Speaking on the evolving role of technology in financial markets, Pandey said the focus of this year's Global Fintech Fest (GFF) on agentic AI is particularly relevant for the securities market, where technology has already become central to market infrastructure and operations.
The shift from conventional AI tools to agentic AI, systems capable of taking actions and executing tasks with limited human intervention, could open up new opportunities for making financial markets more efficient. However, it also raises questions around oversight, risk management and responsibility when automated systems make decisions or execute actions.
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‘Technology Can Be Outsourced, Accountability Cannot'
For SEBI, the central issue is not simply whether new technology can be adopted, but how it can be deployed safely and at scale. "The challenge is how we make technology at scale," Pandey said.
He stressed that while technology can be outsourced, accountability cannot be outsourced by a regulator.
"Tech can be outsourced but accountability cannot be for regulator," Pandey said, underlining the need for regulators to retain responsibility for outcomes even when technology infrastructure or solutions are developed by external providers.
The distinction could become increasingly important as financial institutions and market intermediaries deploy AI-based systems across trading, compliance, surveillance, risk management and customer-facing functions.
Pandey also said the growing role of technology means SEBI's regulatory approach also needs to keep pace with technological change. "Regulatory approach needs to adapt to changing technology," he said.
This could mean a shift away from regulatory frameworks designed primarily around traditional financial processes towards frameworks that account for automated decision-making, AI models, cyber risks and emerging digital infrastructure.
Tokenisation Pilot Signals Next Phase Of Market Innovation
SEBI has already begun exploring emerging technologies through a pilot on the tokenisation of corporate bonds.
The initiative reflects the regulator's broader effort to examine how technology can improve the functioning of securities markets. Tokenisation could potentially enable financial assets to be represented digitally, opening up possibilities around settlement, ownership records and market infrastructure.
For SEBI, such pilots provide a way to understand the benefits and risks of emerging technologies before considering broader adoption or regulatory frameworks.
Quantum Computing Emerges As Cybersecurity Risk
While AI presents opportunities, Pandey also highlighted the technology risks facing financial markets. SEBI's cybersecurity framework recognises quantum computing as a potential threat, reflecting concerns that advances in quantum technology could eventually undermine existing cryptographic systems used to protect financial and market infrastructure.
This puts cybersecurity alongside AI and tokenisation as an increasingly important part of the regulator's technology agenda.
As India's securities markets become more digitally interconnected, a technology failure or cyber breach could have consequences extending beyond individual institutions to market stability and investor confidence.
SEBI is also working on implementation related to the use of AI in the securities market, Pandey said. The objective is not merely to regulate AI as a standalone technology, but to determine how it can be integrated into the securities ecosystem while maintaining market integrity and investor protection.
For SEBI, this creates a regulatory opportunity: using technology to make markets more efficient while ensuring that automation does not weaken accountability.
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