IOSCO: The use of artificial intelligence and machine learning by market intermediaries and asset managers

Further to its June 2021 consultation, IOSCO has published guidance intended to help its members regulate and supervise the use of AI and machine learning. It sets out six measures that seek to ensure that market intermediaries and asset managers have appropriate governance, controls and oversight frameworks over the development, testing, use and performance monitoring of AI and ML; staff with adequate knowledge, skills and experience to implement, oversee, and challenge the outcomes of the AI and ML; robust, consistent and clearly defined development and testing processes to enable firms to identify potential issues prior to full deployment of AI and ML; and appropriate transparency and disclosures to their investors, regulators and other relevant stakeholders. The report also contains annexes which set out how regulators are addressing the challenges created by AI and ML and guidance issued by supranational bodies.