The International Organization of Securities Commissions (IOSCO) has published a Consultation Report, Artificial Intelligence in Capital Markets: Use Cases, Risks, and Challenges, setting out how AI is being deployed across capital markets and the associated risks and supervisory challenges. The report is intended to build a shared understanding among IOSCO members of implications for investor protection, market integrity, and financial stability, and IOSCO is seeking public feedback to inform potential future regulatory tools. Based on engagement with IOSCO members and industry participants, the report highlights five findings: growing use of AI in decision-support functions such as robo-advice, algorithmic trading, investment research and sentiment analysis, alongside expanded use in surveillance and compliance including anti-money laundering and counter-terrorist financing; increasing application of AI to internal operations through automation, communications enhancements and risk management; commonly cited risks including malicious use, model and data issues, concentration and third-party dependency, and human-AI interaction risks; evolving governance and risk management approaches across firms, ranging from integration into existing frameworks to bespoke controls; and diverging regulatory approaches, with some authorities applying existing requirements to AI activities and others developing AI-specific frameworks. Comments are invited through April 11, 2025. IOSCO indicated it will consider whether to develop additional tools, recommendations or considerations to help members address AI-related risks, and will continue to coordinate internationally, including engagement with the Financial Stability Board.

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