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Rules / India

SEBI (Intermediaries) (Amendment) Regulations, 2025 – Regulation 16C: Responsibility for the use of artificial intelligence

In forceRegulationBinding

Makes every SEBI-regulated person that uses AI/ML tools, whether built in-house or bought from third parties, solely responsible for investor data privacy and security, for the outputs of those tools, and for compliance with applicable law. Parallel amendments apply to stock exchanges/clearing corporations and depositories.

Why it matters

Brokers, advisers, fund managers and market infrastructure cannot shift liability for AI outputs to vendors.

What it requires

Data governanceHuman oversight

Key obligations, provision by provision

3 obligations in article order. How IDs work

  1. WTA-R-IN-0003-001Regulation 16C(1)(a)DeployersSince 10 Feb 2025

    Take sole responsibility for the privacy, security and integrity of investor and stakeholder data, including data held in a fiduciary capacity, throughout any processes using AI or machine learning tools.

  2. WTA-R-IN-0003-002Regulation 16C(1)(b)DeployersSince 10 Feb 2025

    Take sole responsibility for the output of AI or machine learning tools that you rely on or deal with, whether designed in-house or procured from third-party technology providers.

  3. WTA-R-IN-0003-003Regulation 16C(1)(c)DeployersSince 10 Feb 2025

    Take sole responsibility for complying with all applicable laws in force when using AI or machine learning tools in your business or investor services.

Penalties

Action under the SEBI Act and Intermediaries Regulations (no AI-specific amount).

SourceSEBI: https://www.sebi.gov.in/legal/regulations/feb-2025/securities-and-exchange-board-of-india-intermediaries-amendment-regulations-2025_91809.htmlSecondary: https://www.sebi.gov.in/reports-and-statistics/reports/jun-2025/consultation-paper-on-guidelines-for-responsible-usage-of-ai-ml-in-indian-securities-markets_94687.html Checked against the source on 4 Oct 2026. Gazetted 10 Feb 2025 (dated 6 Feb), effective on publication. SEBI’s separate draft ‘Guidelines for responsible usage of AI/ML in Indian securities markets’ (consultation paper 20 Jun 2025) had not been finalised as of mid-2026. SEBI consulted on the amendment in Nov 2024.

Cite this record

WTA-R-IN-0003: SEBI (Intermediaries) (Amendment) Regulations, 2025 – Regulation 16C: Responsibility for the use of artificial intelligence. Securities and Exchange Board of India. wheresthe.ai, https://wheresthe.ai/rule/in-sebi-ai-responsibility-reg-16c-2025/ (checked 4 Oct 2026).

History

  • Summary changed from …tools – whether built in-house or bought from third parties –… to …tools, whether built in-house or bought from third parties,…

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