India's Market Regulator to Issue Warning Against AI Risks

India's capital market regulator is preparing to issue a warning about the potential risks posed by artificial intelligence (AI) technologies in financial markets. According to Reuters, the regulatory body will soon publish an advisory note on this matter. The warning aims to address threats that AI-based tools may create in areas such as market manipulation, algorithmic trading errors, and investor protection. The regulator will particularly assess the impact of large language models and automated decision-making systems on market stability. The Securities and Exchange Board of India (SEBI) is adopting a proactive approach to AI risks, outlining points that investors and market participants should consider when using these technologies. The regulator plans to take steps to prevent AI from undermining the principles of transparency and fairness in financial markets. This development aligns with measures taken by regulators globally against AI risks. SEBI's advisory note is expected to be non-binding but guiding for financial institutions and technology companies in India. Not investment advice.