The Chairperson of the Securities and Exchange Board of India (SEBI) has highlighted the regulator’s proactive adoption of artificial intelligence (AI) and technology to strengthen its regulatory framework and ensure the integrity of Indian capital markets. Speaking at ETLegalWorld’s event titled “AI-Powered Legal Solutions: The Next Frontier,” held in association with Microsoft, the Chairperson outlined how SEBI is leveraging AI to enhance efficiency across various regulatory processes.
Key points from her address included:
- AI-Powered Data Collection: SEBI has implemented AI tools to collect and analyze data directly from market participants, minimizing reliance on manual submissions. This has enabled the regulator to formulate policies based on real-time and accurate data.
- Enhanced Litigation and Settlements: AI integration has led to significant improvements in regulatory outcomes, including a higher success rate in litigation (92% before the Securities Appellate Tribunal) and an increase in settlement rates from 11% to 42%.
- Transparency in Regulation: SEBI’s disclosure-based regulatory regime ensures that most market-related information is publicly accessible, allowing the regulator to focus on fostering transparency and accurate disclosures.
The Chairperson emphasized that technological advancements have been instrumental in shaping SEBI’s three-pronged approach: policy formulation, administrative processes, and enforcement. “We believe that quality investigations powered by AI have driven the improvements you see in these metrics,” she remarked, attributing SEBI’s efficient enforcement and settlement mechanisms to AI-driven tools.
Additionally, she highlighted SEBI’s commitment to streamlining operations by incorporating AI into surveillance, investigation, and enforcement processes. This integration has not only improved operational efficiency but also strengthened market confidence. Reflecting on the broader impact of AI on regulation, she added, “A day in the life of the regulator covers three critical aspects: data-driven policy formulation, expedited administrative approvals using AI, and enhanced investigation and enforcement supported by AI.”
The address underscored SEBI’s forward-looking approach to utilizing advanced technology to safeguard and enhance the Indian capital markets while setting a benchmark for AI adoption in regulatory practices.