Regulatory Alerts2024-06-19
Added · Updated
ESMA Initial Guidance on MIFID II Requirements for Firms Using AI in Retail Investment Services
ESMA provides initial guidance to investment firms using or planning to use artificial intelligence technologies, requiring them to prioritize clients' best interests and ensure information is presented clearly, fairly, and without misleading content. Firms must transparently disclose the use of AI tools, such as chatbots, during client interactions and maintain appropriate controls over employee use of third-party AI technologies, including those adopted without senior management approval. The guidance emphasizes adherence to MiFID II organizational, conduct of business, and governance requirements to address risks such as over-reliance, lack of transparency, data privacy concerns, and algorithmic biases.
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