India’s market journey closely watched as global finance turns fragmented: Sebi's Tuhin Kanta Pandey

On technology-driven risks, Pandey added, “Algorithmic markets can create feedback loops. AI models can introduce opacity. Technology can amplify errors at speed. These are not theoretical concerns. They are real and growing.”

• India's securities market is gaining global attention amid fragmented finance
• SEBI chair highlights technology's role and risks in modern securities markets
• Research on AI-driven risks and market microstructure is deemed essential

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India’s securities market evolution is being closely watched globally at a time when international finance is becoming more fragmented and risk-sensitive, the SEBI Chair Tuhin Kanta Pandey said on Thursday.

Speaking at NISM’s 6th Annual International Research Conference on Securities Market, Pandey said, “At a time when global finance is becoming more fragmented and risk sensitive, India’s market journey is being closely watched.” The growing global attention, he added, “raises a responsibility on us to build markets that are deep, trusted and resilient.”

Importance and risks of technology

The remarks come amid heightened volatility in global capital flows. Pandey noted that as India’s markets expand in size, they are also becoming more complex, with technology now forming the “core architecture of modern securities market.”

“Trading, settlement, surveillance etc all are now deeply digital,” Pandey said, highlighting the growing dependence on technology-driven systems.

SEBI's approach, he noted has been to encourage innovation, while remaining vigilant about market integrity and investor protection as artificial intelligence and advanced analytics offer powerful tools.

Also read: SEBI sets up working group to chart technology roadmap for market infrastructure institutions

“They can strengthen surveillance. They can help detect misconduct patterns. They can identify fraud. They can also deepen our understanding of investor behaviour. But innovation is not risk free," he said.

On technology-driven risks, Pandey added, “Algorithmic markets can create feedback loops. AI models can introduce opacity. Technology can amplify errors at speed. These are not theoretical concerns. They are real and growing.”

He also stressed the need for research, saying, “This is where research becomes indispensable. We need rigorous work on market microstructure in digital environments. We need studies on AI-driven risks. We need insights into how technology changes behaviour, incentives and outcomes."

Data, he added, "should not just be observed. It should be questioned, analysed, and used to inform better decisions.”