SEBI chairman Tuhin Kanta Pandey says AI guidelines and clearing reforms coming soon

What SEBI announced at the BSE Brokers’ Forum

On 12 October 2026, SEBI Chairman Tuhin Kanta Pandey addressed the second Capital Market Confluence organised by the Bombay Stock Exchange Brokers’ Forum. He said the regulator will publish guidelines for the responsible use of artificial intelligence (AI) and machine learning (ML) in capital markets "shortly", and that a separate set of rules on the settlement price of derivatives on expiry days will be out in about a week.

AI and ML framework – a tiered, accountable approach

Pandey explained that the forthcoming AI framework will adopt a tiered approach. Core elements will include:

• Clear accountability for firms that deploy AI models;
• Data‑quality controls and robust model‑governance processes;
• Kill‑switch mechanisms that can halt automated actions when required; and
• Human oversight that cannot be displaced by technology.

He added that the guidelines will be aligned with the International Organization of Securities Commissions (IOSCO) supervisory toolkit for AI, ensuring an agile yet rigorous governance structure.

Derivatives settlement price guidance

The regulator is also reviewing feedback on a consultation paper that examined concerns around the settlement price of derivatives on expiry days. After a review of the Closing Auction Session, Pandey said SEBI expects to issue the related guidance within a week.

Extending clearing‑house interoperability

A major operational target was unveiled: by the end of November 2026 SEBI aims to bring tender offers, buy‑backs and offers for sale into the existing clearing‑interoperability framework. Currently these transactions require parallel clearing arrangements, which raise costs and capital requirements. The proposed change is intended to reduce duplicated processes, lower compliance costs and preserve settlement safety.

Digital onboarding for overseas investors

Pandey noted that SEBI has received more than 400 comments on a proposal to simplify digital onboarding of Persons Resident Outside India (PROI) without a physical presence. A circular detailing the new onboarding process is expected shortly.

Market‑size context

To illustrate the scale of the ecosystem, Pandey quoted the following figures:

• ₹472 lakh crore in total market capitalisation;
• 15 crore unique investors;
• ₹87 lakh crore in mutual‑fund assets; and
• ₹61 lakh crore in outstanding corporate bonds.

He stressed that India’s next phase of market development should focus on trust, resilience and efficiency, rather than sheer scale.

Why the moves matter

The announced steps underline SEBI’s commitment to strengthen investor protection while embracing technology. By mandating human oversight and clear accountability, the AI guidelines aim to prevent automated failures that could jeopardise market integrity. Extending clearing interoperability and simplifying overseas onboarding are expected to enhance capital efficiency, lower transaction costs and make Indian markets more attractive to global investors.

Looking ahead

Pandey’s speech signals a busy few weeks for market participants. Firms will need to assess their AI models against the upcoming accountability standards, adjust clearing‑related processes ahead of the November deadline, and prepare for a streamlined digital onboarding regime for foreign investors. The regulator’s proactive stance is presented as a means to maintain stability and bolster India’s standing as a world‑class capital market.