About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

EU Parliament Approves Landmark Artificial Intelligence Act

Subscribe to our newsletter

The EU Parliament has approved the Artificial Intelligence Act, marking the world’s first regulation of AI. The regulation establishes obligations for AI based on its potential risks and level of impact and is designed to ensure safety and compliance with fundamental rights, democracy, the rule of law and environmental sustainability, while boosting innovation.

The act needs to be formally endorsed by the European Council and will come into force 20 days after its publication in the Official Journal. It will be applicable 24 months later except for  bans on prohibited practices, which will apply six months after the regulation comes into force; codes of practice that will come in after nine months; general-purpose AI rules including governance that will come in after a year; and obligations for high-risk systems that will follow in three years.

The regulation covers all types of AI including generative AI and is, no doubt, being scrutinised by capital markets participants as they continue to extend their use of the technology – more on this coming soon.

The act sets out key measures including:

  • Safeguards on general purpose artificial intelligence
  • Limits on the use of biometric identification systems by law enforcement
  • Bans on social scoring and AI used to manipulate or exploit user vulnerabilities
  • Right of consumers to launch complaints and receive meaningful explanations

It also covers high-risk AI systems that are not specifically identified but are likely to include those used in capital markets. These systems must assess and reduce risks, maintain use logs, be transparent and accurate, and ensure human oversight. Citizens will have a right to submit complaints about AI systems and receive explanations about decisions based on high-risk AI systems that affect their rights.

To encourage innovation across the board, regulatory sandboxes and real-world testing will have to be established at the national level and made accessible to SMEs and start-ups to develop and train innovative AI before it goes to market.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: GenAI and LLM case studies for Surveillance, Screening and Scanning

As Generative AI (GenAI) and Large Language Models (LLMs) move from pilot to production, compliance, surveillance, and screening functions are seeing tangible results – and new risks. From trade surveillance to adverse media screening to policy and regulatory scanning, GenAI and LLMs promise to tackle complexity and volume at a scale never seen before. But...

BLOG

Financial Institutions ‘Layering’ New Risks as Report Highlights Greenwashing Exposure

The number of financial institutions flagged for greenwashing climbed substantially in the past year, highlighting both the vulnerability of individual firms and the need to integrate greenwashing risk management into decision-making processes.. The sector remained the worst offender for overstating their progress or making vague or misleading claims, the report by sustainability risk data company...

EVENT

TEST Event page 1

Now in its 15th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

ESG Data Handbook 2022

The ESG landscape is changing faster than anyone could have imagined even five years ago. With tens of trillions of dollars expected to have been committed to sustainable assets by the end of the decade, it’s never been more important for financial institutions of all sizes to stay abreast of changes in the ESG data...