Sebi Develops AI-Driven Tool to Enhance Cyber Safety Analysis for Regulated Entities

The Securities and Exchange Board of India (Sebi) is creating an AI-powered tool to assess the cyber safety readiness of regulated entities, according to Chairman Tuhin Kanta Pandey. Speaking at the BSE, Pandey highlighted the tool's role in enhancing risk-based supervision. This development coincides with Sebi's efforts to establish a working group for a technology roadmap for market infrastructure institutions (MIIs).

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Pandey explained that the AI-driven inspection tool will scrutinise cyber audit reports, pinpoint control deficiencies, and categorise entities by their risk levels. This initiative aims to bolster the regulatory framework by ensuring that innovation enhances market integrity rather than undermines it. The tool is part of Sebi's broader strategy to adapt to increasing investor participation and market diversification.

Technology Roadmap for MIIs

The proposed technology roadmap will offer MIIs a structured vision for both short-term (five years) and long-term (ten years) strategies within the securities market ecosystem. Pandey emphasised the importance of continuous investment in technology, risk management, and cyber resilience by exchanges and other MIIs. This approach aims to maintain trust and ensure that regulatory systems evolve alongside market developments.

Pandey remarked on the enduring nature of markets, stating they are built on institutions that inspire trust and regulations that adapt over time. He noted that enduring markets are not reliant on temporary highs or cycles of optimism but on robust systems that continuously upgrade. This perspective aligns with Sebi's focus on strengthening the regulatory architecture to uphold market integrity.

Historical Context of BSE and Sensex

Reflecting on the Sensex, launched in 1986, Pandey described it as more than just an index; it symbolises India's capital market journey. He acknowledged the deep connection between the Indian securities market and the Bombay Stock Exchange (BSE), one of Asia's oldest stock exchanges. This historical context underscores the significance of ongoing developments in India's financial landscape.

Pandey concluded by urging stakeholders to ensure that technological advancements support rather than compromise market integrity. His remarks highlight Sebi's commitment to fostering a resilient and trustworthy securities market through strategic innovation and regulatory evolution.

With inputs from PTI