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Sebi Reviews Short Selling and SLB Rules; Plans AI Sandbox and Bond Market-Making
Sentiment: NeutralHigh Priority
What Happened?
The Securities and Exchange Board of India (Sebi) is reviewing short selling and securities lending to enhance liquidity. It is also exploring an AI sandbox for regulatory certainty and developing a market-making framework for corporate bonds.
Key points
- Sebi is reviewing short selling and SLB to improve liquidity and price discovery.
- An AI sandbox is being explored for testing new tools safely.
- Guidelines on responsible AI use are being finalized with a tiered approach.
- A market-making framework for corporate bonds is under development.
- Sebi plans to extend automated facilities to custodial clients in the cash segment.
- Growing technology-related risks are highlighted, especially with algorithmic trading.
Key insights
- The introduction of an AI sandbox may foster innovation in financial technologies.
- Improved market-making frameworks could lead to better liquidity in corporate bonds.
- Addressing technology-related risks is crucial as algorithmic trading becomes more prevalent.
Why it matters
These developments could enhance market efficiency and investor protection in India.
Source
Business Standard
