MFs obligated to submit reports on AI/ML-based systems to SEBI

The Securities and Exchange Board of India (SEBI) upped its scrutiny of MFs by raising the surveillance bar. It did so by demanding that the fund houses provide quarterly information pertaining to the AI-based systems employed by them.

MF houses are obligated to submit all the details about the Artificial Intelligence (AI) and Machine Learning- based applications and systems in a prescribed format from the quarter ending June 2019. It is required to submit the same to the Association of Mutual Funds in India (AMFI).

They are also required to report in the prescribed format all fintech initiatives undertaken by market participants that involve AI and ML.

These quarterly reports have to be submitted within 15 days from the end of the quarter to AMFI. The AMFI would then proceed to consolidate the information and submit the same within 30 calendar days from the end of a quarter to SEBI.

SEBI is in the process of conducting surveys aimed at creating an inventory of the entire AI/ML landscape that is operational in the Indian markets. This will enhance its understanding of these new-age technologies and assist in preparation for any AI/ML policies that may crop up in the future.