SEBI Forms AI Cybersecurity Task Force, Issues New Safeguards For Market Entities

The Securities and Exchange Board of India on Tuesday announced the formation of a dedicated task force to address cybersecurity risks linked to artificial intelligence systems used across financial markets.

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The regulator said the new group, named cyber-suraksha.ai, will focus on emerging cyber threats arising from AI-driven tools used for vulnerability detection and automated security assessments. SEBI also issued an advisory to regulated entities, including stock exchanges, depositories, clearing corporations and intermediaries, asking them to strengthen cybersecurity frameworks amid the growing use of advanced AI systems.

According to the regulator, AI-based tools are increasingly being used to identify system vulnerabilities at scale and at faster speeds across the financial sector.

However, SEBI said these systems also introduce risks related to data confidentiality, system integrity and misuse of automated outputs.

Task Force To Include Market Institutions

The cyber-suraksha.ai task force will include representatives from market infrastructure institutions, exchanges, clearing corporations, depositories and other regulated entities.

SEBI said the group will examine cybersecurity threats linked to artificial intelligence systems, review vulnerabilities across the securities market ecosystem and develop common mitigation standards. The task force will also oversee threat intelligence sharing and assess cybersecurity risks associated with third-party vendors and service providers.

According to SEBI, the Indian securities market operates through interconnected systems, increasing the risk of wider disruption if one part of the ecosystem faces a cyber breach.

The regulator said coordinated monitoring and faster response systems are necessary to reduce systemic risks.

SEBI Issues Cybersecurity Expectations

The advisory issued by SEBI includes guidelines related to continuous software updates, vulnerability assessments, stronger third-party oversight and stricter security controls for application programming interfaces.

The regulator also asked market participants to improve real-time monitoring through security operations centres and automated incident response systems.

SEBI further stated that the regulated firms should undertake regular cyber threat assessments and scenario tests based on AI risks. It was also noted that it is important to maintain up-to-date inventory lists of important software programs, which include the open-source software.

SEBI opined that any significant change in the system must go through a rigorous testing, review, and documentation process before implementation. SEBI also encouraged adopting state-of-the-art cybersecurity practices, such as the Zero Trust model.

Technology Stocks And Market Reaction

Shares of information technology companies remained in focus following SEBI’s cybersecurity advisory. The BSE Information Technology Index closed 1.5% higher during the latest trading session.

Coforge shares gained 9.6% after the company reported strong quarterly earnings, while other technology stocks also witnessed selective buying interest during the session.

Indian benchmark indices ended higher on May 6. The Sensex rose 1.22% to close at 77,958.52, while the Nifty 50 advanced 1.24% to settle at 24,330.95.

SEBI said regulated entities should also prepare for the long-term integration of artificial intelligence into cybersecurity systems while continuously reviewing associated risks and safeguards.