On Jan. 5, IND CDSL, IND NSD updated on AI and machine learning.
IND CDSL provided an update on reporting for artificial intelligence (AI) and machine learning (ML) applications/systems offered and used by market intermediaries.
Follows IND NSD Oct. 2023 required submission of quarterly reports, see #168451.
Also follows SEBI Jan. 2019 issued requirements on artificial intelligence, see #51417.
Revised Timeline
Currently, depositary participants (DPs) using AI/ML based application/system have to fill in a form (annexure A) every quarter within 15 calendar days of quarter expiry.
New timeline requires yearly submission made within 3 months of financial year end.
Further, for applications and systems belonging but not limited to the categories of AI and ML technology, DPs may refer to annexure B of SEBI circular dated Jan. 4, 2019.
Report is mandatory for all DPs irrespective of whether they are using AI/ML systems or not; DPs not using AI and ML systems are required to submit NIL submission.
Effectiveness
Participants have to submit the AI/ML report on the e-PASS portal for financial year ended Mar. 31, 2024 onwards within three months of the end of the financial year.
Mar. 2024 IND BSE Submissions
On Mar. 28, 2024, IND BSE reminded that timeline for reporting of AI/ML applications and systems was revised in Dec. 2023 (#168451); members should submit details.
Trading members shall submit the details for the period ending Mar. 31, 2024, as per the applicability criteria given in the table, according to the type of intermediary.
Trading members offering or using applications or systems as defined in annexure B of SEBI's 2019 circular are required to submit the details in AI/ML reporting form.
Those who are not are also required submit the form, by selecting option No in BEFS.
The reports must be submitted electronically through BEFS by Apr. 15, 2024.
Apr. 1, 2024 IND NSE Submissions
On Apr. 1, 2024, IND NSE required submissions re AI/ML applications and systems.
Trading members using algorithm software and other trading members shall submit reports for the period ending Mar. 31, 2024, as per the applicability criteria given.
All members are advised to ensure submission by Apr. 15, 2024.
Apr. 22, 2024 Reporting Requirements
On Apr. 22, 2024, IND CDSL issued reporting requirements for AI, ML applications.
Frequency of reporting has been changed from quarterly to annually; DPs are required to submit reports on use of AI and ML systems, submit NIL report if not using.
Reports must now be submitted annually within three months of the financial year end.
DPs are required to submit report of AI and ML on IND CDSL’s audit web portal for the financial year ended Mar. 31, 2024; onwards within 3 months of end of financial year.
Regulators
IND BSE; IND CDSL; IND NSD; IND NSE
Entity Types
B/D; Depo; Exch; IA
Reference
Cir CDSL/RISK/DP/POLCY/2024/214, 4/22/2024; Cir 16/2024, NSE/COMP/61401, 4/1/2024; Nt 20240328-23, 3/28/2024; Com CDSL/A,I&C/DP/POLCY/2024/12, Cir NSDL/POLICY/2024/0003, 1/5/2024; Cir SEBI/HO/MIRSD/DOS2/CIR/P/2019/10, 1/4/2019; Comm CDSL/OPS/DP/POLCY/2019/12, 1/7/2019; Cir NSDL/POLICY/2023/0142, 10/5/2023;
