Mutual Fund

SEBI to come up with sandbox policy soon

Securities and Exchange Board of India (SEBI) is planning to come up with a sandbox policy to support technology development for financial markets, an official said here on Thursday. We will come out with a sandbox policy. We are examining whether any changes in laws are required in terms of its dispensation, Ajay Tyagi said. Sandbox concept is something that one can try before implementing it on a larger scale and it refers to experimenting and learning before adopting a technology or system. Tyagi said the capital market regulator is also working out whether something new can be tried without any legislative changes. The Insurance Regulatory and Development Authority of India has set up a committee to look into the concept of a regulatory sandbox in India. He pointed out that there had been substantial technology interventions in capital markets in the past and it would continue. Tyagi also said that Machine-learning and Artificial Intelligence have made inroads in the area of high frequency and algorithmic trading and some bits of fund management as well. According to him, regulators may have to develop the capacity to vet software codes and algorithms, test those algorithms for malfunction, if any, and consider encoding checks and balances of investor protection in those smart contracts and algorithms itself.

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