SEBI to release guidelines for artificial intelligence and derivative prices

The Securities and Exchange Board of India will shortly issue new guidelines for the responsible use of artificial intelligence and machine learning in capital markets, SEBI Chairman Tuhin Kanta Pandey announced on October 10, 2026. Pandey made the public announcement during his address at the second Capital Market Confluence 2026, an industry conference organized by the Bombay Stock Exchange Brokers' Forum.

The regulatory framework for artificial intelligence and machine learning will adopt a tiered approach to market oversight. Under the framework outlined by SEBI, regulated entities must implement clear accountability mechanisms, stringent data controls, automated kill switches, and continuous human oversight. These mandatory elements are designed to ensure responsible technology deployment across capital market operations.

SEBI designed the incoming artificial intelligence regulations to align with the international supervisory toolkit established by the International Organization of Securities Commissions. The market regulator emphasized that regulated entities will remain strictly responsible for all outcomes generated by their artificial intelligence systems. Furthermore, these entities remain responsible for maintaining data quality, executing model governance, and ensuring robust cyber resilience across all deployed technologies.

Derivative Settlement Guidelines

Alongside its rules for artificial intelligence, SEBI is preparing to publish guidelines regarding derivative settlement prices on expiry days. Pandey stated that the regulator plans to release these specific guidelines on derivative settlement prices within approximately one week following his October 10 announcement.

The forthcoming guidelines on derivative settlement prices follow an extensive feedback process regarding SEBI's Closing Auction Session consultation paper. SEBI received approximately 20,000 comments from market participants and stakeholders on the Closing Auction Session consultation paper by October 3, 2026. The regulator used these inputs to shape the final settlement rules expected later in October.

Interoperability Framework

SEBI is also advancing plans to integrate additional market transaction types into its existing operational infrastructure. The market regulator targets bringing tender offers, buybacks, and offers for sale into the regulatory interoperability framework by late November 2026.

The inclusion of tender offers, buybacks, and offers for sale will modify how these corporate actions are processed across Indian exchanges. Regulated entities under SEBI supervision will be required to prepare their internal systems to support these transaction types within the updated interoperability framework by the late November deadline.