{"id":70876,"date":"2026-09-30T14:40:49","date_gmt":"2026-09-30T09:10:49","guid":{"rendered":"https:\/\/www.equentis.com\/blog\/?p=70876"},"modified":"2026-09-30T14:40:52","modified_gmt":"2026-09-30T09:10:52","slug":"sebis-tuhin-kanta-pandey-flags-accountability-as-ai-and-technology-reshape-portfolio-management","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/sebis-tuhin-kanta-pandey-flags-accountability-as-ai-and-technology-reshape-portfolio-management\/","title":{"rendered":"SEBI\u2019s Tuhin Kanta Pandey Flags Accountability as AI and Technology Reshape Portfolio Management"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div>\n<p class=\"wp-block-paragraph\">SEBI Chairman Tuhin Kanta Pandey has stressed that <strong>AI and technology may transform portfolio management, but accountability for their use will remain with regulated entities<\/strong>. As artificial intelligence, cloud computing, automation and data analytics become more deeply integrated into India\u2019s securities markets, SEBI is focusing on governance, human oversight, cybersecurity and risk management alongside innovation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Introduction<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Technology is already changing how financial institutions analyse information, monitor risks and serve investors. Artificial intelligence can process large amounts of market data, identify patterns and support faster decision making. More advanced systems, including agentic AI, can potentially take actions with limited human intervention.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For portfolio managers and other market intermediaries, this creates both efficiency gains and new responsibilities. Pandey&#8217;s recent comments underline a central principle: using a technology vendor or an AI system does not transfer regulatory responsibility away from the entity using it.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Context and Background<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">SEBI has been increasing its focus on technology driven supervision as Indian capital markets become more digital and participation expands.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the Global Fintech Fest 2026, Pandey said SEBI was working towards implementing the <strong>International Organization of Securities Commissions (IOSCO) supervisory toolkit for AI<\/strong> in the Indian securities market. The objective is to strengthen risk management and develop an adaptable approach to AI governance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SEBI itself is also using technology more extensively. Earlier this year, Pandey said AI was being used to help monitor financial influencers, advertisements and potential market irregularities, including areas related to insider trading.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The message is therefore not that AI should be avoided. Instead, the regulatory approach is increasingly centred on ensuring that technology is introduced with appropriate controls.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How AI Could Change Portfolio Management<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Portfolio management involves analysing investments, assessing risk, constructing portfolios and monitoring them over time. AI can potentially support several parts of this process.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Faster analysis of market information<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">AI systems can process large datasets far more quickly than traditional manual processes. Portfolio managers can use technology to analyse financial statements, market trends, news and other structured or unstructured information.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Automated risk monitoring<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Technology can continuously monitor portfolios against predefined risk parameters. This may help identify unusual exposures, concentration risks or changes in market conditions more quickly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">More personalised investment processes<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Data-driven systems can potentially help portfolio managers understand different investor requirements and risk profiles. However, personalisation still requires appropriate controls, accurate data and responsible human oversight.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Greater use of automated decision systems<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The emergence of agentic AI takes the discussion further. Unlike conventional analytical tools, agentic systems may be designed to execute tasks or actions with limited human intervention. That creates additional questions around who reviews decisions, how errors are identified and when human intervention is required.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why Accountability Matters<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Pandey&#8217;s central concern is that outsourcing technology cannot mean outsourcing responsibility.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A portfolio manager may use an external AI platform, cloud provider or software vendor. But if that system contributes to a compliance failure, operational problem or market integrity issue, the regulated entity cannot simply point to the vendor.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">SEBI&#8217;s approach places importance on governance areas such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Cybersecurity and data protection<\/li>\n\n\n\n<li>Business continuity<\/li>\n\n\n\n<li>Incident management<\/li>\n\n\n\n<li>System testing<\/li>\n\n\n\n<li>Human oversight<\/li>\n\n\n\n<li>Access to important data and systems<\/li>\n\n\n\n<li>Ongoing assessment of technology providers<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Pandey has also indicated that technology providers should be subject to risk based and proportionate oversight, particularly where their systems are closely connected to trading, settlement, sensitive information or investor outcomes.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What It Means for Investors<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">For retail and high net worth investors using portfolio management services, the increasing use of AI could improve the speed and scale of analysis. However, technology should not be viewed as a substitute for accountability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Investors may increasingly want to understand how their portfolio manager uses automated systems, how investment decisions are reviewed and what safeguards exist when technology produces an unexpected result.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The quality of governance can become just as important as the technology itself.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Opportunities and Risks<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">AI can potentially make portfolio management more efficient by reducing manual processes, improving monitoring and helping professionals analyse larger datasets. Technology can also strengthen regulatory surveillance by identifying patterns that may be difficult to detect through traditional methods.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the same time, AI introduces risks. Poor quality data can produce unreliable outputs. Models may be difficult to interpret, while cybersecurity incidents or failures at a common technology provider could affect multiple financial institutions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another concern is model drift. AI systems can change or behave differently as models, software or underlying data evolve. This is why technology oversight cannot necessarily end when a vendor is initially approved. Pandey has highlighted the need for continuous testing, change notifications and periodic reassessment for critical providers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Should Investors Watch Next?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The next phase of India&#8217;s AI regulation will be important as SEBI develops its framework for responsible AI and machine learning use in securities markets. Reports in August indicated that proposed safeguards could include human oversight, data controls and mechanisms to stop automated systems when necessary.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Meanwhile, SEBI is also advancing other technology initiatives. Its work with the RBI on tokenised corporate bonds under the Demat 2.0 initiative demonstrates how technology is being explored across different parts of India&#8217;s financial infrastructure.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">AI is likely to become increasingly important in portfolio management, from research and risk monitoring to investor services and regulatory compliance. SEBI&#8217;s approach under Tuhin Kanta Pandey makes clear that technological adoption must be accompanied by governance.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For investors, the important takeaway is that an AI powered system is still part of a human and institutional responsibility chain. As technology becomes more sophisticated, transparency, cybersecurity, human oversight and accountability will remain essential factors in maintaining confidence in India&#8217;s financial markets.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">1. What did Tuhin Kanta Pandey say about AI and accountability?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">SEBI Chairman Tuhin Kanta Pandey has emphasised that while financial institutions may outsource technology, they cannot outsource accountability. Regulated entities remain responsible for compliance, resilience and market integrity even when AI systems, cloud infrastructure or other technology solutions are provided by external vendors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. How is AI changing portfolio management?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">AI can help portfolio managers analyse large volumes of market and financial data, monitor portfolio risks and automate certain processes. More advanced systems may also perform tasks with limited human intervention. This can improve efficiency but increases the need for controls, monitoring and human oversight.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. What is agentic AI in financial markets?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Agentic AI refers to systems that can perform tasks or take actions with limited human intervention rather than simply providing information or analysis. In financial markets, such systems could potentially automate parts of decision making or execution, creating additional requirements around oversight, risk management and accountability.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4. Why is SEBI focusing on AI regulation?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">AI is becoming increasingly integrated into financial markets, including surveillance, investment processes and investor services. SEBI is developing a framework to encourage responsible adoption while addressing risks related to governance, data, cybersecurity, model reliability and investor protection.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5. Can portfolio managers outsource AI technology?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Portfolio managers can use external technology providers, but outsourcing the technology does not remove their regulatory responsibilities. SEBI&#8217;s position is that regulated entities must retain appropriate oversight of systems and vendors that affect compliance, resilience, market integrity or investor outcomes.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">6. What are the main risks of using AI in portfolio management?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Key risks include inaccurate or biased data, model errors, limited transparency, cybersecurity threats, operational failures and excessive dependence on automated systems. There can also be risks when AI models or software change over time without adequate testing or monitoring.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">7. Can AI replace human portfolio managers?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">AI can automate analytical and operational tasks, but its growing use does not eliminate the need for human oversight. Investment decisions involve judgement, risk assessment, compliance and responsibility. SEBI&#8217;s approach emphasises maintaining accountability even as financial institutions adopt increasingly sophisticated technology.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">8. How is SEBI itself using AI?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">SEBI has said it is increasingly using AI for areas including monitoring financial influencers, advertisements and potential market irregularities. The regulator is also working towards implementing the IOSCO AI supervisory toolkit to strengthen technology driven oversight of India&#8217;s securities market.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">9. What should investors ask portfolio managers about AI?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Investors can consider asking how technology is used in investment and risk management, what human review exists, how data is protected and how errors or system failures are handled. Understanding the governance framework can provide useful context alongside the portfolio manager&#8217;s investment process.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">10. What should investors watch as SEBI develops AI rules?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Investors should watch for SEBI&#8217;s detailed framework covering responsible AI use, governance, human oversight, data controls and risk management. They should also follow how portfolio managers and other regulated entities implement these requirements as AI becomes more integrated into investment and market operations.<\/p>\n\n\n\n<p class=\"has-ast-global-color-5-color has-vivid-red-background-color has-text-color has-background has-link-color wp-elements-a377517bdd8f600e0c2e7efd2ef366fd wp-block-paragraph\">Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis \u2013 Research &amp; Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL &amp; certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>SEBI Chairman Tuhin Kanta Pandey has stressed that AI and technology may transform portfolio management, but accountability for their use [&hellip;]<\/p>\n","protected":false},"author":25,"featured_media":70882,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[948],"tags":[],"class_list":["post-70876","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-market-news"],"_links":{"self":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/70876","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/comments?post=70876"}],"version-history":[{"count":1,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/70876\/revisions"}],"predecessor-version":[{"id":70886,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/70876\/revisions\/70886"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media\/70882"}],"wp:attachment":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media?parent=70876"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/categories?post=70876"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/tags?post=70876"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}