Ethics & Policy
Sebi Charts AI Rulebook For Stock Market! A Five-Point Framework to Govern Machine Learning Use in Securities
The guidelines, detailed in the consultation paper titled ‘Guidelines for Responsible Usage of AI/ML in the Indian Securities Market’, were shaped by a Sebi-appointed working group comprising experts who reviewed both Indian and international practices.
The Securities and Exchange Board of India (Sebi) has unveiled a draft framework to regulate the use of Artificial Intelligence (AI) and Machine Learning (ML) technologies across the securities market, citing the urgent need for responsible innovation. The move follows growing adoption of algorithmic models by stock exchanges, mutual funds, and brokerages. Sebi released a consultation paper on Friday inviting public feedback by 11 July 2025, outlining five guiding principles aimed at ensuring transparency, fairness, and investor protection.
The guidelines, detailed in the consultation paper titled ‘Guidelines for Responsible Usage of AI/ML in the Indian Securities Market’, were shaped by a Sebi-appointed working group comprising experts who reviewed both Indian and international practices.
“AI and ML are becoming integral to how markets function, but their unchecked use could pose systemic risks,” the paper notes, adding that the proposed framework seeks to ensure that “innovation does not compromise investor trust or market integrity.”
What Sebi Is Proposing
The five-point regulatory framework focuses on:
Entities using AI/ML must establish dedicated internal teams with technical knowledge to supervise and audit models. Senior management will be held directly responsible for the full AI lifecycle—from development to third-party oversight.
If AI/ML systems directly impact investors—such as in advisory services or automated trading—then clear disclosures must be made regarding model purpose, associated risks, accuracy rates, and limitations. Disclosures must use simple, investor-friendly language.
Sebi wants firms to conduct thorough model testing in simulated environments before real-world application. Additionally, all model documentation and logs must be preserved for at least five years to ensure traceability.
To prevent discrimination or skewed decision-making, firms are advised to use diverse, high-quality datasets. Staff must be trained to identify and correct biases in algorithmic outputs.
The proposed framework mandates strict data governance protocols, with a focus on robust cybersecurity and user data privacy. Firms must ensure compliance with prevailing data protection laws.
The regulator has clarified that AI/ML models used for internal surveillance or analytics will face lighter scrutiny, while those influencing investor decisions will be subject to tighter regulation.
“Our objective is not to stifle innovation but to ensure that any technology introduced in the market does not compromise investor safety or market stability,” said a Sebi official familiar with the development.
Why It Matters
AI and ML are already in use for functions ranging from real-time fraud detection to automated investment advisory. In 2024 alone, the number of brokerages using AI-powered customer services and predictive market tools grew by over 25 per cent, according to Sebi’s internal research. However, concerns have been mounting about the lack of accountability and transparency in model usage—especially when algorithms behave unpredictably.
Earlier, global regulators such as the US Securities and Exchange Commission (SEC) and the UK’s Financial Conduct Authority (FCA) introduced preliminary AI guidelines, with a focus on ethics and fairness. Sebi’s consultation paper draws heavily from those precedents while tailoring recommendations to India’s unique investor landscape, which includes a large number of retail participants.
The new draft also complements other recent reforms, such as the easing of delisting norms for public sector undertakings (PSUs) and improved oversight of Initial Public Offerings (IPOs).
What Happens Next
Public comments will be accepted until 11 July. After evaluating stakeholder feedback, Sebi is expected to finalise the regulatory framework later this year, making India one of the first major emerging markets to formally regulate AI/ML usage in its capital markets.
Market participants and industry bodies like the Association of Mutual Funds in India (AMFI) and BSE Brokers Forum are expected to submit their views in the coming weeks.
Ethics & Policy
Experts gather to discuss ethics, AI and the future of publishing
Publishing stands at a pivotal juncture, said Jeremy North, president of Global Book Business at Taylor & Francis Group, addressing delegates at the 3rd International Conference on Publishing Education in Beijing. Digital intelligence is fundamentally transforming the sector — and this revolution will inevitably create “AI winners and losers”.
True winners, he argued, will be those who embrace AI not as a replacement for human insight but as a tool that strengthens publishing’s core mission: connecting people through knowledge. The key is balance, North said, using AI to enhance creativity without diminishing human judgment or critical thinking.
This vision set the tone for the event where the Association for International Publishing Education was officially launched — the world’s first global alliance dedicated to advancing publishing education through international collaboration.
Unveiled at the conference cohosted by the Beijing Institute of Graphic Communication and the Publishers Association of China, the AIPE brings together nearly 50 member organizations with a mission to foster joint research, training, and innovation in publishing education.
Tian Zhongli, president of BIGC, stressed the need to anchor publishing education in ethics and humanistic values and reaffirmed BIGC’s commitment to building a global talent platform through AIPE.
BIGC will deepen academic-industry collaboration through AIPE to provide a premium platform for nurturing high-level, holistic, and internationally competent publishing talent, he added.
Zhang Xin, secretary of the CPC Committee at BIGC, emphasized that AIPE is expected to help globalize Chinese publishing scholarships, contribute new ideas to the industry, and cultivate a new generation of publishing professionals for the digital era.
Themed “Mutual Learning and Cooperation: New Ecology of International Publishing Education in the Digital Intelligence Era”, the conference also tackled a wide range of challenges and opportunities brought on by AI — from ethical concerns and content ownership to protecting human creativity and rethinking publishing values in higher education.
Wu Shulin, president of the Publishers Association of China, cautioned that while AI brings major opportunities, “we must not overlook the ethical and security problems it introduces”.
Catriona Stevenson, deputy CEO of the UK Publishers Association, echoed this sentiment. She highlighted how British publishers are adopting AI to amplify human creativity and productivity, while calling for global cooperation to protect intellectual property and combat AI tool infringement.
The conference aims to explore innovative pathways for the publishing industry and education reform, discuss emerging technological trends, advance higher education philosophies and talent development models, promote global academic exchange and collaboration, and empower knowledge production and dissemination through publishing education in the digital intelligence era.
yangyangs@chinadaily.com.cn
Ethics & Policy
Experts gather to discuss ethics, AI and the future of publishing
Publishing stands at a pivotal juncture, said Jeremy North, president of Global Book Business at Taylor & Francis Group, addressing delegates at the 3rd International Conference on Publishing Education in Beijing. Digital intelligence is fundamentally transforming the sector — and this revolution will inevitably create “AI winners and losers”.
True winners, he argued, will be those who embrace AI not as a replacement for human insight but as a tool that strengthens publishing”s core mission: connecting people through knowledge. The key is balance, North said, using AI to enhance creativity without diminishing human judgment or critical thinking.
This vision set the tone for the event where the Association for International Publishing Education was officially launched — the world’s first global alliance dedicated to advancing publishing education through international collaboration.
Unveiled at the conference cohosted by the Beijing Institute of Graphic Communication and the Publishers Association of China, the AIPE brings together nearly 50 member organizations with a mission to foster joint research, training, and innovation in publishing education.
Tian Zhongli, president of BIGC, stressed the need to anchor publishing education in ethics and humanistic values and reaffirmed BIGC’s commitment to building a global talent platform through AIPE.
BIGC will deepen academic-industry collaboration through AIPE to provide a premium platform for nurturing high-level, holistic, and internationally competent publishing talent, he added.
Zhang Xin, secretary of the CPC Committee at BIGC, emphasized that AIPE is expected to help globalize Chinese publishing scholarships, contribute new ideas to the industry, and cultivate a new generation of publishing professionals for the digital era.
Themed “Mutual Learning and Cooperation: New Ecology of International Publishing Education in the Digital Intelligence Era”, the conference also tackled a wide range of challenges and opportunities brought on by AI — from ethical concerns and content ownership to protecting human creativity and rethinking publishing values in higher education.
Wu Shulin, president of the Publishers Association of China, cautioned that while AI brings major opportunities, “we must not overlook the ethical and security problems it introduces”.
Catriona Stevenson, deputy CEO of the UK Publishers Association, echoed this sentiment. She highlighted how British publishers are adopting AI to amplify human creativity and productivity, while calling for global cooperation to protect intellectual property and combat AI tool infringement.
The conference aims to explore innovative pathways for the publishing industry and education reform, discuss emerging technological trends, advance higher education philosophies and talent development models, promote global academic exchange and collaboration, and empower knowledge production and dissemination through publishing education in the digital intelligence era.
yangyangs@chinadaily.com.cn
Ethics & Policy
Lavender’s Role in Targeting Civilians in Gaza
The world today is war-torn, starting with Russia’s attacks on Ukraine to Israel’s devastation in Palestine and now in Iran, putting the entire West Asia in jeopardy.
The geometrics of war has completely changed, from Blitzkrieg (lightning war) in World War II to the use of sophisticated and technologically driven missiles in these latest armed conflicts. The most recent wars are being driven by use of artificial intelligence (AI) to narrow down potential targets.
There have been multiple evidences which indicate that Israeli forces have deployed novel AI-driven targeting tools in Gaza. One system, nicknamed “Lavender” is an AI-enabled database that assigns risk scores to Gazans based on patterns in their personal data (communication, social connections) to identify “suspected Hamas or Islamic Jihad operatives”. Lavender has flagged up to 37,000 Palestinians as potential targets early in the war.
A second system, “Where is Daddy?”, uses mobile phone location tracking to notify operators when a marked individual is at home. The initial strikes using these automated generated systems targeted individuals in their private homes on the pretext of targeting the terrorists. But innocent women and young children also lost their lives in these attacks. This technology was developed as a replacement of human acumen and strategy to identify and target the suspects.
According to the Humans Rights Watch report (2024), around 70 per cent of people who have lost lives were women and children. The United Nations agency has also verified the details of 8,119 victims killed in Gaza from November 2023 to April 2024. The report showed that 44 per cent of the victims were children and 26 per cent were women. The humans are merely at the mercy of this sophisticated technology that identified the suspected militants and targeted them.
The use of AI-based tools like “Lavender” and “Where’s Daddy?” by Israel in its war against Palestine raises serious questions about the commitment of countries to the international legal framework and the ethics of war. Use of such sophisticated AI targeted tools puts the weaker nations at the dictate of the powerful nations who can use these technologies to inflict suffering for the non-combatants.
The international humanitarian law (IHL) and international human rights law (IHRL) play a critical yet complex role in the context of AI during conflict situations such as the Israel-Palestine Conflict. Such AI-based warfare violates the international legal framework principles of distinction, proportionality and precaution.
The AI systems do not inherently know who is a combatant. Investigations report that Lavender had an error rate on the order of 10 per cent and routinely flagged non-combatants (police, aid workers, people who merely shared a name with militants). The reported practice of pre-authorising dozens of civilian deaths per strike grossly violates the proportionality rule.
An attack is illegal if incidental civilian loss is “excessive” in relation to military gain. For example, one source noted that each kill-list target came with an allowed “collateral damage degree” (often 15–20) regardless of the specific context. Allowing such broad civilian loss per target contradicts IHL’s core balancing test (ICRC Rule 14).
The AI-driven process has eliminated normal safeguards (verification, warnings, retargeting). IHRL continues to apply alongside IHL in armed conflict contexts. In particular, the right to life (ICCPR Article 6) obliges states to prevent arbitrary killing.
The International Court of Justice has held that while the right to life remains in force during war, an “arbitrary deprivation of life” must be assessed by reference to the laws of war. In practice, this means that IHL’s rules become the benchmark for whether killings are lawful.
However, even accepting lex specialis (law overriding general law), the reported AI strikes raise grave human rights concerns especially the Right to Life (ICCPR Art. 6) and Right to Privacy (ICCPR Art. 17).
Ethics of war, called ‘jus in bello’ in the legal parlance, based on the principles of proportionality (anticipated moral cost of war) and differentiation (between combatants and non-combatants) has also been violated. Article 51(5) of Additional Protocol I of the 1977 Geneva Convention said that “an attack is disproportionate, and thus indiscriminate, if it may be expected to cause incidental loss of civilian life, injury to civilians, damage to civilian objects, or a combination thereof, which would be excessive in relation to the concrete and military advantage”.
The Israel Defense Forces have been indiscriminately using AI to target potential targets. These targets though aimed at targeting militants have been extended to the non-military targets also, thus causing casualties to the civilians and non-combatants. Methods used in a war is like a trigger which once warded off is extremely difficult to retract and reconcile. Such unethical action creates more fault lines and any alternate attempt at peace resolution and mediation becomes extremely difficult.
The documented features of systems like Lavender and Where’s Daddy, based on automated kill lists, minimal human oversight, fixed civilian casualty “quotas” and use of imprecise munitions against suspects in homes — appear to contravene the legal and ethical principles.
Unless rigorously constrained, such tools risk turning warfare into arbitrary slaughter of civilians, undermining the core humanitarian goals of IHL and ethics of war. Therefore, it is extremely important to streamline the unregulated use of AI in perpetuating war crimes as it undermines the legal and ethical considerations of humanity at large.
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