ICMA responds to IOSCO Consultation Report on Artificial Intelligence in Capital Markets: Use Cases, Risks, and Challenges
11 April 2025 ICMA welcomes the opportunity to comment on IOSCO’s Consultation Report on Artificial Intelligence in Capital Markets: Use Cases, Risks, and Challenges. This response reflects the views of the AI in Capital Markets Working Group.
ICMA values the work IOSCO is doing to provide more public intelligence on the use of AI in capital markets, and in general, aligns with the key findings of the report, including that benefits and risks of AI in financial services are highly dependent on the type of AI technology used, how it is developed and for what purpose.
ICMA also agrees that, in some cases, the terminology used to discuss AI has not always been clear, and certain terms have been used to cover a multitude of different aspects of AI with distinctive and different qualities. ICMA remains available to assist with any efforts made to address these challenges, such as defining a set of boundaries to clarify some of the terminology, to work towards a more productive and consistent global dialogue on the topic.
ICMA members note that models, such as LLM’s and others used in Gen AI systems, can require significant computational resources and energy consumption in both their training and usage. Likewise, IOSCO also highlights the large amounts of memory required to store LLM’s, and the subsequent contribution AI usage might make to environmental risks. Further exploration on this topic would be of particular interest to the debt capital markets industry, due to the cross-cutting theme of ESG.
It may also be beneficial for IOSCO to consider establishing a set of minimum general principles governing AI. IOSCO’s composition of global financial service regulators, in addition to recent guidance and regulatory initiatives on the topic of AI, such as ESMA’s 2024 guidance to firms using AI in investment services and HKSAR’s policy statement on responsible AI in the financial sector, provide an opportunity for IOSCO to further reflect on common themes and facilitate convergence at an international level between regulators in the financial sector.
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