ESMA provides guidance to firms using artificial intelligence in investment services

30/05/2024

The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, today issued a Statement providing initial guidance to firms using Artificial Intelligence technologies (AI) when they provide investment services to retail clients.

When using AI, ESMA expects firms to comply with relevant MiFID II requirements, particularly when it comes to organisational aspects, conduct of business, and their regulatory obligation to act in the best interest of the client.

Although AI technologies offer potential benefits to firms and clients, they also pose inherent risks, such as:

Algorithmic biases and data quality issues;
Opaque decision-making by a firm’s staff members;
Overreliance on AI by both firms and clients for decision-making; and
Privacy and security concerns linked to the collection, storage, and processing of the large amount of data needed by AI systems.

Potential uses of AI by investment firm which would be covered by requirements under MiFID II include customer support, fraud detection, risk management, compliance, and support to firms in the provision of investment advice and portfolio management.

Next steps

ESMA and the National Competent Authorities (NCAs) will keep monitoring the use of AI in investment services and the relevant EU legal framework to determine if further action is needed in this area.

Vissza a tetejére

The primary objective of the MNB shall be to achieve and maintain price stability. (...) Without prejudice to its primary objective, the MNB shall support the maintenance of the stability of the system of financial intermediation, the enhancement of its resilience, its sustainable contribution to economic growth; furthermore, the MNB shall support the government’s economic policy and its policy related to environmental sustainability, using instruments at its disposal.