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Informist, Thursday, Jun. 18, 2026

 

MUMBAI – The National Stock Exchange of India Ltd. highlighted the risks to its operations and the securities market from artificial intelligence and machine learning technologies. A proliferation of AI-driven and algorithmic trading strategies could increase market volatility, the stock exchange said in its draft red herring prospectus.

 

"While such technologies have the potential to enhance operational efficiency, they also introduce significant risks, as AI and ML (machine learning) systems are inherently complex and may produce inaccurate, biased, or sub-optimal outputs...", the company said. These incorrect outputs from AI could result in "operational failures", it said. 

 

"In particular, failures in AI-based surveillance or risk management systems....could lead to miscalculation of margin requirements or settlement exposures, potentially increasing systemic risk in the Indian capital markets," the DRHP said.

 

The trading strategies using AI can give rise to new forms of market manipulation that are difficult to detect, the DRHP said. It also warned about the risk of AI being used for cyberattacks.

 

NSE said foreign AI tools and platforms pose risks related to intellectual property and vendor dependency. There is also uncertainty over the regulations around AI and this could create new challenges in the future, the company said.

 

The NSE filed its draft papers with the Securities and Exchange Board of India late Wednesday which consists solely of an offer for sale of 148.9 million shares. State Bank of India will sell the largest chunk among all the shareholders of NSE, offering 24.8 million shares through the public offer.  End

 

Reported by Anshul Choudhary

Edited by Deepshikha Bhardwaj

 

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