With reference to SEBI's Guidelines for Responsible Usage of AI/ML in Indian Securities Markets (2025), which of the following statements is/are correct? 1. The guidelines mandate market participants to implement shadow testing with live traffic and independent auditing of AI/ML systems. 2. The framework applies a uniform, heavy regulatory burden on all AI models regardless of whether they interact directly with customers.

Question

Accepted Answer

1 only — Statement 1 is correct as SEBI mandates continuous monitoring, shadow testing, and independent audits for AI models. Statement 2 is incorrect because SEBI proposed a tiered approach, applying a lighter regulatory framework for AI/ML usage that does not directly impact customers.