Sebi Chairman Tuhin Kanta Pandey announced on Friday that the capital markets regulator is working on creating an AI-driven tool to assess the cyber safety readiness of regulated entities.

While addressing the BSE, Pandey mentioned that Sebi is in the midst of forming a working group aimed at creating a technology roadmap for market infrastructure institutions (MIIs).

"An AI-powered inspection tool is in the works to enhance risk-based oversight of regulated entities," remarked Pandey during the 40th anniversary event of the benchmark Sensex at the oldest stock exchange.

The tool being developed will examine cyber audit reports, detect control deficiencies, and categorize entities according to their risk exposure, Pandey stated.

The technology roadmap will offer MIIs a systematic strategic technology vision for the securities market ecosystem, encompassing 5 years (short-term) and 10 years (long-term), Pandey stated.

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He encouraged exchanges and other MIIs to keep investing in technology, risk management, and cyber resilience.
"We must make sure that innovation enhances, rather than undermines, market integrity," he stated.

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Sebi has concentrated on reinforcing the regulatory framework that maintains market integrity as investor participation broadens and diversifies, he stated.

Sustainable markets are not created from fleeting peaks or periods of positivity. "They are established on institutions that foster trust, regulations that progress alongside markets, and systems that continually evolve and improve," the Sebi chief stated.

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Discussing the Sensex established in 1986, Pandey noted that the benchmark represents not only an index but also a testament to the progression of India's capital market up to the present.

"The Indian securities market is closely linked with the history of the Bombay Stock Exchange (currently BSE) one of Asia's oldest stock markets," he stated.