Sebi working on technology roadmap for stock exchanges, other MIIs

Sebi chairman Tuhin Kanta Pandey said the regulator is planning a working group for a technology roadmap for market infrastructure institutions and is developing new AI tools for supervision

The Securities and Exchange Board of India (Sebi) is planning a working group to develop a technology road map for market infrastructure institutions (MIIs) such as stock exchanges, clearing corporations, and depositories, Chairman Tuhin Kanta Pandey said on Friday.

 

Speaking at the celebrations of 40 years of Sensex, Pandey further detailed plans of the market regulator to develop artificial intelligence (AI) tools for supervision.

 

“Sebi is in the process of constituting a working group to develop a technology road map for MIIs. This road map will provide the MIIs a structure, five-year and 10-year technology vision for the securities market ecosystem,” said Pandey.

 

On strengthening MIIs, the Sebi chairman called for investments in technology, risk management, and cyber resilience to match with the rapidly evolving market ecosystem.

 

“The next phase of market development will be defined not just by scale but by quality and sophistication,” said Pandey, emphasising on investor protection along with innovation.

 

The Sebi chairman also detailed technology-driven measures taken by the regulator such as AI-powered market surveillance system to detect fraudsters, AI-driven advertisement viewer to monitor and analyse advertisements by asset management companies, and tools to monitor disclosures by listed entities.

 

“AI-driven inspection tool is currently under development to strengthen risk-based supervision of regulated entities. This tool will analyse cyber audit reports, identify control gaps, and classify entities based on their risk exposure, thereby enhancing supervisory effectiveness,” said Pandey.

 

On the journey of Sensex, the Sebi chairman said: “Over the last four decades, the Sensex has stood the test of time as a robust market indicator, mirroring India’s economic transformation and the growing maturity of our capital markets. As India liberalised and integrated with global markets, the index evolved alongside the economy.”

 

He added that the changing composition of the index has reflected the rise of private enterprises, shifts from traditional industries to services, finance and technology, and deeper linkages between domestic markets and global capital.

 

“Enduring markets are not built on momentary highs or cycles of optimism. They are built on institutions that inspire, regulation that evolves in markets and systems, and then continuously adapts and upgrades,” the Sebi chief said while reminiscing the endurance of the Indian market ecosystem in global crises such as World Wars, Dot Com bubble burst, and Covid-19.

 

Speaking to Business Standard, Sundararaman Ramamurthy, managing director and chief executive officer (MD&CEO) of the BSE, said: “Indian markets are today at a stage where we need the common man to participate in capital creation and market development. In my opinion, the safest way in which a common man can contribute to the market for himself and also for the country is index investment. Indices are going to play a very important role. With its legacy, its resilience, Sensex is going to be one of the most important indices.”