SEBI warns of AI risks in Indian financial markets
SEBI announced plans to issue an advisory warning Indian financial market participants of risks posed by advanced AI models, particularly Anthropic's Mythos, which could be exploited to identify and exploit vulnerabilities at speed and scale.
What happened
SEBI Chairperson Tuhin Kanta Pandey announced on May 4, 2026 that the regulator will soon issue an advisory to market participants on risks posed by Anthropic's AI model Mythos, which is currently available only to a limited set of entities.
Pandey said SEBI is in constant engagement with market participants and relevant stakeholders, warning that Mythos and similar AI models will "test our resilience". He noted that while AI tools can identify weaknesses faster, they can also exploit vulnerabilities at speed and scale.
Reported impact
Pandey cautioned that technology may be misused, algorithms may move faster than human controls, and digital platforms may become channels for fraud. He emphasized that market players should proactively find vulnerabilities and patch them.
Index analysis
SEBI is working on a report assessing risks linked to artificial intelligence and is coordinating with other regulators on new-age threats. The regulator is approaching the issue through strengthening market integrity, enhancing corporate board accountability, and monitoring emerging AI-related risks.
Governance controls
SEBI plans to issue an advisory outlining how market participants should stay alert to vulnerabilities and play a proactive role in mitigation. The regulator emphasizes the importance of a disclosure-based framework and robust governance standards.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.