AI Washing Can Mislead Markets, Erode People's Trust: SEBI's Amarjeet Singh

Amarjeet Singh, the Executive Director of the Securities and Exchange Board of India (SEBI), has raised concerns over the increasing use of artificial intelligence (AI) in financial markets, warning that it can lead to misinformation and a lack of transparency. In a recent statement, Singh emphasized that the financial ecosystem should not allow individuals to be disadvantaged due to opacity, manipulation, or conflicts of interest that AI technologies might introduce. He highlighted the potential risks posed by AI in creating confusion among investors, ultimately eroding their trust in the markets. Singh's remarks come amidst growing reliance on AI tools within trading and investment practices, which, while offering efficiency, can also lead to ethical and regulatory challenges. SEBI is advocating for greater clarity and accountability in the use of AI to ensure that market participants can operate in a fair environment, free from the adverse effects of technological manipulation. This call for vigilance reflects a broader dialogue on the need for regulatory frameworks that can adapt to the rapid advancements in AI while safeguarding investor interests.