11 November 2021
Subsequent to the consultation report published by IOSCO in June 2021, the final guidance report (“IOSCO Report”) for artificial intelligence (“AI”) and machine learning (“ML”) entitled “The use of artificial intelligence and machine learning by market intermediaries and asset managers” was released on 7 September 2021.
Per the IOSCO Report, market intermediaries and asset managers tend to achieve cost reductions and improve efficiency through the use of AL and ML. While market intermediaries, asset managers and investors receive benefits including efficiency enhancement, cost reduction and resource sparing, a concern is amplification of risk that affects the interests of consumers and other market participants.
In the light of the above, the IOSCO Report sets out some recommended measures to ensure that the interests of investors and other relevant stakeholders are protected. Further, Annex I and Annex 2 to the IOSCO Report outline the regulators’ responses to the challenges arising from AI and ML, and the guidance issued by supranational bodies respectively.
