TMI BlogReporting for Artificial Intelligence (AI) and Machine Learning (ML) applications and systems offered and used by market intermediariesX X X X Extracts X X X X X X X X Extracts X X X X ..... in investor and consumer facing products. SEBI is conducting a survey and creating an inventory of the AI / ML landscape in the Indian financial markets to gain an in-depth understanding of the adoption of such technologies in the markets and to ensure preparedness for any AI / ML policies that may arise in the future. 2. As most AI / ML systems are black boxes and their behavior cannot be easily quantified, it is imperative to ensure that any advertised financial benefit owing to these technologies in investor facing financial products offered by intermediaries should not constitute to misrepresentation Scope definition 3. Any set of applications / software / programs / executable / systems (computer systems) cumulatively cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Stock Exchanges and Depositories have to consolidate and compile a report, on AI / ML applications and systems reported by registered Stock Brokers / Depository Participants in the reporting format (Annexure C) on quarterly basis. The said report (Annexure C) shall be submitted in soft copy only at AI_SE@sebi.gov.in (for Stock Exchange) / AI_DEP@sebi.gov.in (for Depositories) to SEBI within 30 calendar days of the expiry of the quarter, starting from quarter ending March 2019. 8. Stock Exchanges and Depositories shall; a) make necessary amendments to the relevant byelaws, rules and regulations for the implementation of the above direction; b) bring the provisions of this circular to the notice of their members/participants and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AML / Surveillance / compliance/others (please specify in 256 characters) 7.a Does the system involve order initiation, routing and execution? Yes / NO 7.b Does the system fall under discretionary investment or Portfolio management activities? Yes / NO 7.c Does the system disseminate investment or trading advice or strategies? Yes / NO 7.d Is the application/system used in area of Cyber Security to detect attacks Yes / NO 7.e What claims have been made regarding AI and ML Applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ta. In this case, Voice to text, text to intelligence systems in any natural language will be considered in scope. Eg: robo chat bots, big data intelligence gathering systems. 2. Neural Networks or a modified form of it. In this case, any systems that uses a number of nodes (physical or software simulated nodes) mimicking natural neural networks of any scale, so as to carry out learning from previous firing of the nodes will be considered in scope. Eg: Recurrent Neural networks and Deep learning Neural Networks 3. Machine learning through supervised, unsupervised learning or a combination of both. In this case, any application or systems that carry out knowledge representation to form a knowledge base of domain, by learning a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Does system audit report comply to circular no SEBI/HO/MIRS D/DOS2/CIR/P /2019/10 dated January 4, 2019 of SEBI Is there any adverse comment in the System audit report Was the entity inspected in past 1 year If inspected was any irregularity noted order execution / Advisory services / KYC / AML / Surveillance / compliance/others (please specify in 256 characters) Yes / NO/ Yes / NO/ Yes / NO Yes / NO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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