Reporting for Artificial Intelligence (AI) and Machine Learning (ML) applications and systems offered and used by Mutual Funds

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....erings by market intermediaries and participants (e.g.: "robo advisors") in investor and consumer facing products. SEBI is conducting a survey and creating an inventory of the AI / ML landscape in the Indian financial markets to gain an in-depth understanding of the adoption of such technologies in the markets and to ensure preparedness for any AI / ML policies that may arise in the future. 2. As most AI / ML systems are black boxes and their behavior cannot be easily quantified, it is imperative to ensure that any advertised financial benefit owing to these technologies in investor facing financial products offered by intermediaries should not constitute to misrepresentation. Scope definition 3. Any set of applications / software ....

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....thin 15 calendar days of the expiry of the quarter to AMFI. 7. AMFI shall consolidate the information on AI / ML applications and systems reported by Mutual Funds on quarterly basis and submit to SEBI at email id [email protected] within 30 calendar days of the expiry of the quarter, starting from quarter ending June 2019. 8. AMFI shall ensure that confidentiality is maintained regarding the information received by them from Mutual Funds. 9. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, to protect the interests of investors in securities and to promote th....

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.... and how it uses AI / ML as portrayed in the product offering   12 What safeguards are in place to prevent abnormal behavior of the AI or ML application / System?   13 Is the AI / ML system included in the scope of system audit, if applicable?   14 Is there any adverse comment in the system audit regarding the AI / ML system? If yes, details of the adverse comments may be provided.   Annexure B - Systems deemed to be based on AI and ML technology Applications and Systems belonging but not limited to following categories or a combination of these: 1. Natural Language Processing (NLP), sentiment analysis or text mining systems that gather intelligence from unstructured data. - In this....