Fintech News · 25 October 2026 · 3 min read
In short: Speaking in Mumbai on Saturday, 24 October, SEBI Chairman Tuhin Kanta Pandey said the market regulator is finalising responsible AI guidelines, plans graded compliance for stockbrokers based on their size and risk, and is reviewing short selling and stock lending. None of these is a rule yet, and no dates were given.
What SEBI is working on
| Area | What is planned |
|---|---|
| Use of AI | Responsible AI guidelines with “kill switches”, human oversight, data controls and clear accountability; also an AI sandbox where firms can test new tools under supervision. |
| Broker rules | Compliance requirements graded by a broker’s size, number of clients and reliance on technology, instead of one set of rules for all. |
| Trading terminals | New safeguards against misuse of brokers’ trading terminals. |
| Short selling | A review of short selling and securities lending and borrowing, to improve trading and price discovery. |
| Corporate bonds | A market-making framework so bonds are easier to buy and sell after issue. |
| Inspections | One digital system for inspections, and simpler rules for depository participants with stronger fraud checks. |
What it means for you
- Safer trading apps: Pandey warned that “a single outage can hurt thousands of investors within minutes”. Expect brokers to face tougher expectations on uptime and cyber security.
- Rules for AI-driven advice: as brokers and fund houses use AI for recommendations, research and trading, the guidelines aim to keep a human responsible and allow risky systems to be switched off quickly.
- Possibly easier entry for small brokers: graded compliance could lower costs for smaller firms, which may mean more choice for investors.
- Nothing changes today: these are plans. SEBI usually publishes a consultation paper first and invites public comments before any rule takes effect.
Protect yourself in the meantime
- Use two-factor authentication on your trading and demat apps.
- Never share OTPs or trading passwords, even with someone claiming to be from your broker.
- Check your contract notes and demat statement every month for trades you did not place.
Read more fintech and investing updates in our Fintech News section.
Sources
- Business Standard: Sebi reviews short selling, SLB rules; plans AI sandbox (24 October 2026)
- The Shillong Times: SEBI plans broker compliance, AI sandbox, bond reforms
- Kotak Neo: SEBI plans trading terminal safeguards and broker compliance rules
This is a news summary for education, not investment advice. Figures are as reported on or before 25 October 2026; check official sources before making decisions.