Sebi reviews short selling and SLB framework, plans AI sandbox and corporate bond market-making

Key facts

• Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey announced a review of short selling and securities lending and borrowing (SLB) rules to improve liquidity and price discovery.
• Sebi is exploring an artificial intelligence (AI) sandbox to test new tools safely and is finalising guidelines on responsible AI use with a tiered approach covering accountability, data controls, kill switches and human oversight, in line with the International Organization of Securities Commissions' toolkit.
• Sebi is developing a market-making framework to boost secondary trading in corporate bonds.
• Sebi is exploring graded compliance requirements for stockbrokers based on scale, client exposure and reliance on technology.
• Sebi will extend the automated give-up and take-up facility to custodial clients such as portfolio management services (PMS) and alternative investment funds (AIFs) in the cash segment.
• Sebi is reworking depository participant rules, extending the Samuhik Prativedan Manch to depositories, and addressing parallel clearing in tender offers, buybacks and offers for sale.