On 6-2-2025, the Securities and Exchange Board of India notified the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2025 to amend the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018. The provisions will come into force on 1-4-2025.
Key Points:
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Regulation 9-A relating to “Interest on non-payment, belated payment or short payment of annual fee and annual charge” has been introduced which mandates the depository to pay an interest of 15% for every month of delay in case the depository fails to pay/ pay belatedly/ pay in short, the annual fee or annual charge.
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Regulation 82-AA relating to “Responsibility for use of Artificial Intelligence” has been introduced:
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If a Depository uses Artificial Intelligence and machine learning tools and techniques, then that person will be solely responsible for:
✓ The privacy/ security and integrity of investors’ and stakeholders’ data including data maintained by it in a fiduciary capacity throughout the processes involved;
✓output arising from the usage of such tools/ techniques it relies upon or deals with;
✓compliance with applicable laws in force.
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Such AI can be designed by SEBI or procured from third-party technology service providers.
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The expression “AI and machine learning tools and techniques” will include “artificial intelligence and machine learning tools and techniques” may include any application or software program or executable system or a combination thereof, offered by the depository to investors/stakeholders or used internally by it to facilitate trading and settlement or to carry out its activities including for compliance requirements and the same are portrayed as part of the products offered to the public or under usage for compliance or management or other business purposes.”.
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