# AI security and governance built for capital markets.

> AI governance for capital markets, in ColossalX, means classifying unpublished price-sensitive information and redacting the identifiers you define from prompts, an inventory of the models, agents and AI vendors in use, SEBI cyber circulars mapped beside India DPDP and ISO/IEC 42001, and evidence of AI use, timestamped daily, that an examiner can check.

Keep price-sensitive information out of prompts, govern third-party AI and keep a record of AI use an examiner can check.

Canonical page: https://colossalx.tech/solutions/capital-markets · Last reviewed: 6 Oct 2026

*Illustration:* Price-sensitive data · at the gateway: analyst-bot to ColossalX; advisor-bot held for a person before ColossalX (trade); unknown caller found calling ColossalX (found); ColossalX with data redacted, to provider A (deal code redacted).

## Why capital markets firms are looking hard at AI.

Financial firms pay the most for a breach and are attacked more often; agent attacks exploit weak access control and injection.

- INR 40.9 crore: average cost of a breach in Indian financial services (INR 409 million), the highest of any sector in India (IBM Cost of a Data Breach India 2026, 3 Aug 2026, https://in.newsroom.ibm.com/India-Records-its-Highest-Average-Cost-of-a-Data-Breach-2026)
- 1.6 times: the global average: the rate at which Indian banking, financial services and insurance are attacked (DSCI-BCG, 28 May 2026, https://www.dsci.in/files/content/press-release/2026/cyber-threats-escalate-across-indian-financial-institutions-as-ai-reshapes-the-cybersecurity-landscape.pdf)
- Over half: of successful cyberattacks on AI agents through 2029 are expected to exploit access control weaknesses and prompt injection (Gartner, 26 Aug 2026, https://www.gartner.com/en/newsroom/press-releases/2026-08-26-gartner-forecasts-the-market-for-securing-ai-will-reach-almost-5-billion-in-2027)

DSCI and BCG found that AI-specific controls such as formal AI governance, agent monitoring and runtime guardrails are "still being built across the sector" (DSCI-BCG, Indian BFSI cyber threat study, 28 May 2026, https://www.dsci.in/files/content/press-release/2026/cyber-threats-escalate-across-indian-financial-institutions-as-ai-reshapes-the-cybersecurity-landscape.pdf)

## Where AI meets market data, and what holds it.

Four places where AI meets price-sensitive and client data, each held by a control.

- **The threat:** An analyst pastes unpublished results into a prompt to an outside model. **The control:** Classification marks price-sensitive data; guardrails redact the identifiers you define, both ways. [Runtime guardrails](https://colossalx.tech/platform/runtime-guardrails)
- **The threat:** Nobody can show an examiner which AI saw which client data. **The control:** Lineage from gateway traffic: which agent sent which kinds of data to which model. [Data lineage](https://colossalx.tech/platform/data-lineage)
- **The threat:** Third-party AI tools are in use, but nobody assessed or owns them. **The control:** Shadow AI is found in traffic; the vendor inventory flags tools in use, not assessed. [Shadow AI](https://colossalx.tech/platform/shadow-ai)
- **The threat:** A research agent misbehaves and nobody can stop it. **The control:** Containment on the limits you set, and the ColossalX Kill Switch at 4 scopes. [Detection and response](https://colossalx.tech/platform/detection-response)

## What regulators ask for, and how ColossalX relates.

Mapped frameworks, what each asks of a market firm, and the dates that matter.

| Instrument | What it asks for | How ColossalX relates |
| --- | --- | --- |
| SEBI cyber circulars | Cyber security and resilience controls for regulated securities market entities. | Mapped to |
| India DPDP | Consent and purpose limits for personal data, with consent managers. | Mapped to |
| ISO/IEC 42001 | An AI management system: policy, roles, risk and controls. | Mapped to |
| NIST AI RMF | Govern, map, measure and manage AI risk across its life. | Mapped to |
| SOC 2 | Security, availability and confidentiality controls, evidenced over time. | Mapped to |
| EU AI Act | For firms serving the EU: duties scaled to risk, from transparency up. | Mapped to |

### Regulatory clock

- 13 Nov 2026: India DPDP consent manager rules start (PIB, DPDP Rules 2025, https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/nov/doc20251117695301.pdf)
- 13 May 2027: India DPDP core obligations start (PIB, DPDP Rules 2025, https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/nov/doc20251117695301.pdf)

## What you see, and what you can show an examiner.

An identifier replaced before a prompt left the firm, beside the evidence pack an examiner can check.

- Which agent sent which kinds of data to which model, drawn from gateway traffic.
- Each redaction, refusal and approval hold, with the policy that made it.
- Third-party AI in use but not assessed, carried into the risk register as owned work.
- Evidence graded A to D, verified by a second person and timestamped daily.

*Illustration:* An illustrative governed chat: an Indian tax identifier (PAN) in a message is replaced with a token before it leaves, so the model only ever sees the token, and the answer shows that the PAN was redacted and which group model answered. Notes: 1. Identifier replaced before sending 2. The redaction, shown on the answer 3. The group model that answered

*Illustration:* Evidence pack · an outline: Inventory Models, agents and vendors, owned; Lineage Which data reached which model; Runtime Redactions, refusals, approval holds; Audit A sealed, timestamped archive. Graded A to D.

## Specs: delivery and data

- **Delivery:** SaaS, from one login.
- **Isolation:** Each customer runs in an isolated workspace with its own database.
- **Certifications:** None held. Frameworks are mapped to and assessed against.

## What ColossalX does not do

- Redaction finds the identifiers its presets and your own patterns describe, not ones nobody defined.
- SEBI's AI and ML guidelines were still a consultation when reviewed; ColossalX maps the cyber circulars.
- Provider and model kill switches catch the requests that name that provider or model.
- ColossalX holds no certification and is delivered as SaaS only.

*Illustration:* Redaction · only what is defined: research-agent to provider A · outside model, "Draft talking points on the unannounced merger". Checks: Your deal-code patterns passed, Personal data presets passed. Verdict: allowed, No defined pattern matched.

## Questions

### What has SEBI proposed for AI and ML use?

SEBI consulted on guidelines for responsible use of AI and ML in Indian securities markets, proposing senior-management accountability, testing and monitoring, audit trails and accountability for third parties. No final circular had been found when this page was last reviewed. ColossalX maps the SEBI cyber circulars and keeps the inventory, lineage and evidence those proposals point to.

### How do we keep unpublished price-sensitive information out of AI tools?

Classify it and define the identifiers that mark it. ColossalX classification covers unpublished price-sensitive information, guardrails at the AI gateway redact the identifiers you define in prompts and answers, and shadow AI discovery finds the AI tools used around the gateway. Data lineage then shows which agent sent which kinds of data to which model.

### What audit trail of AI use does ColossalX keep?

The AI gateway keeps a decision record per request, and data lineage shows which agent sent which kinds of data to which model. Session recordings replay an agent request by request. Evidence is graded A to D, timestamped daily and withdrawn, never deleted, and audits end in a sealed, timestamped archive.

### Which SEBI circulars does ColossalX map?

ColossalX maps its controls to the SEBI cyber circulars and assesses them from live signals, with one score per framework trended nightly, beside India DPDP, ISO/IEC 42001, NIST AI RMF, the EU AI Act, SOC 2 and GDPR. Frameworks are mapped to and assessed against, never certified, and jurisdiction-pack content is a starting point for your counsel.

### Can we govern third-party AI vendors?

Yes. The risk register keeps an AI vendor inventory that flags vendors in use but not assessed, shadow AI discovery finds AI services nobody approved, and threat intelligence matched to your vendors and models turns a warning into a recorded decision, which can become a restriction at the gateway.

## Sources

- SEBI consultation on responsible use of AI and ML in securities markets, as reported by Business Standard, 20 Jun 2025: https://www.business-standard.com/markets/news/sebi-proposes-ai-ml-guidelines-for-market-participants-125062001137_1.html

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ColossalX is an AI security and governance platform from Quantexra Labs LLP, delivered as SaaS. Book a walkthrough: https://colossalx.tech/demo · client.success@quantexra.tech