The Securities and Exchange Board of India (SEBI) is in the process of constituting a working group to develop a technology roadmap for market infrastructure institutions (MIIs), which will provide exchanges, clearing corporations and depositories a structured five-year and ten-year strategic technology vision for the securities market ecosystem.
Speaking at the Bombay Stock Exchange event marking 40 years of the Sensex, SEBI chairman Tuhin Kanta Pandey said, “Amid a rapidly evolving market environment, exchanges and other MIIs must continue to invest in technology, risk management and cyber resilience, ensuring that innovation strengthens, not weakens, market integrity.”
The next phase of market development will be defined not by scale alone but by quality, sophistication and trust, with investor protection remaining central, he said on Thursday.
Pandey said Indian markets have transformed over the past four decades from manual trading and limited participation to a technology-driven, professionally governed ecosystem supported by strong clearing, settlement and depository infrastructure. This institutional evolution, he said, has ensured that growth in volumes and participation has been accompanied by robust risk management and orderly markets.
As markets become more complex and globally interconnected, SEBI is stepping up the use of technology to anticipate risks before they surface. Emerging technologies, particularly artificial intelligence, offer efficiency gains but also introduce new challenges, making proactive supervision critical, he said.
Technology boost
SEBI has internally developed several AI-driven tools to strengthen market surveillance and supervision. These include systems to detect unauthorised investment advisory and research activity on digital and social media platforms, an AI-based reviewer to monitor mutual fund advertisements for potential code violations, and sentiment analysis tools to flag material corporate disclosures and generate timely alerts.
An AI-driven inspection tool for cyber health checks of regulated entities is also under development to support risk-based supervision.
Strengthening the technological backbone of the securities market is another priority. The regulator has introduced validated UPI handles and the SEBI Check facility to enable instant verification of genuine intermediary bank accounts and UPI IDs, aimed at reducing cyber fraud.
A cybersecurity and cyber resilience framework has been put in place across regulated entities, while a Market Security Operations Centre is being developed to provide cybersecurity support to smaller intermediaries that lack in-house expertise.
MII governance
MIIs are foundational pillars of the securities ecosystem and must meet the highest standards, he said. SEBI has mandated external independent performance evaluations of MIIs and their statutory committees once every three years, in addition to internal assessments. Governance norms have also been strengthened with clearer reporting lines for key management personnel, including technology and information security heads, to ensure direct board oversight of critical operations.
Reflecting on the Sensex’s 40-year journey, he said the index has mirrored India’s economic transformation through liberalisation, technological change and global integration. While markets move in cycles, enduring value is built through governance, competitiveness and long-term value creation