The AMF has been working for some years now with industry participants to analyze the use of artificial intelligence (AI) systems and understand the impact of its use on the financial markets.

Background

Over the past few years, the AMF has advanced several initiatives related to the digital transformation of the financial industry, notably to anticipate regulatory and consumer protection issues. In 2021, in response to the rise of AI and the growing interest it was generating, the AMF signaled its commitment to promote the importance of the ethical use of AI in the financial sector by signing the Montréal Declaration for responsible AI development. At the same time, the AMF published Artificial intelligence in finance – Recommendations for its responsible use (pdf - 32 MB)This link will open in a new windowUpdated on March 8, 2022The accelerating digital transformation in the financial services industry is resulting in major changes in the processes of many businesses. Technological innovations such as advanced analytics and artificial intelligence (AI) are being deployed at a rapid pace and are contributing to an increase in the number of options available to consumers. Moreover, access to big data on consumer profiles and patterns means it is now possible to pinpoint the needs of consumers more precisely and to offer them personalized financial products and services. Although this profound transformation is yielding tangible benefits, it is also bringing to light significant, a document prepared at the AMF’s request by Algora Lab, an interdisciplinary laboratory of the University of Montréal and Mila, in partnership with the CIFAR Chair in AI Ethics.

In 2023, the AMF contributed to the Réflexion collective sur l’encadrement de l’intelligence artificielle au Québec (collective reflection on the regulation of artificial intelligence in Québec) This link will open in a new window, an initiative led by the Conseil de l’innovation du Québec. The results of this initiative were published in a report entitled Prêt pour l’IA – Répondre au défi du développement et du déploiement responsables de l’IA au Québec (in French only) This link will open in a new window. 

In February 2024, to continue its reflection and respond to the 2021 responsible use recommendations for AI in finance, the AMF published Issues and Discussion Paper - Best practices for the responsible use of AI in the financial sector (pdf - 1 MB)This link will open in a new windowUpdated on February 8, 2024Since 2016, the AMF has undertaken various mission-aligned initiatives relating to the digital transformation of the financial sector to, in particular, anticipate regulatory and consumer protection issues. In November 2021, it made a clear statement of its interest in the responsible use of artificial intelligence (AI) by signing the Montréal Declaration for responsible AI development and by publishing the paper Artificial intelligence in finance – Recommendations for its responsible use (the 2021 Report), a report prepared at the AMF’s request by Algora Lab, an interdisciplinary lab of the University of Montréal and the Institut québécois d’intelligence artificielle (Mila). The 2021 Report sets out 10 recommendations to promote the responsible development of AI in finance: three directed toward the AMF and seven toward the industry., an initiative designed to open a dialogue on the opportunities and issues associated with the use of AI in finance that focused on risks to consumers, financial players, market integrity and financial stability.

Participants in this initiative generally expressed support for the sought objectives and identified risks and agreed that consumers needed to be protected. Their comments aligned on the following key points:

• Importance of harmonization and consistency: Harmonizing domestic and international frameworks and aligning any local initiatives with existing frameworks.
• Adoption of a principles- and risk-based approach: A flexible, proportionate approach that would be focused on the significance of risks, with expectations modulated according to level of risk and impact on consumers and markets.
• Search for a balance: The establishment of an innovation-promoting environment ensuring the responsible use of AI, including appropriate governance and accountability.

Efforts and collaboration

The AMF is continuing its efforts to ensure the responsible use of AI in the financial sector and to minimize the related risks.

In Québec

The AMF is developing a guideline clarifying its expectations in this matter for financial institutions operating in Québec. The guideline will apply to life and health insurers, property and casualty insurers, financial services cooperatives, trust companies and savings companies, and will be issued for public consultation between now and the beginning of 2025. In addition, the Guideline applicable to credit assessment agents will be amended to incorporate expectations regarding the use of AI

In Canada and at the international level

The AMF is also continuing its efforts to strengthen its influence and ensure alignment of international, national and provincial laws and principles. At the national level, the AMF continues to participate in ongoing work within the Canadian Securities Administrators (CSA). In particular, it is a contributor to the CSA Financial Innovation Hub, whose focus includes the use of AI in finance, specifically AI’s various applications in capital markets.

On December 5, 2024, the CSA published CSA Staff Notice 11-348, Applicability of Canadian Securities Law to the Use of Artificial Intelligence Systems in Capital Markets. In addition to providing clarification and guidance on how securities legislation applies to the use of AI systems by capital market participants, CSA staff are posing questions to gather feedback on the evolving role of these systems and whether current supervisory and regulatory approaches should be adapted or modified in light of developments in this area. The consultation period will end on March 31, 2025. The CSA invites interested parties to respond to the questions posed in the notice, posted on CSA member websites.

At the international level, the AMF continues to contribute to the development of standards adapted to the characteristics of the markets it regulates, while taking into account regulatory developments in international markets. For example, the AMF is involved in the work of the International Organization of Securities Commissions (IOSCO) and is helping to draft good practices for the use of AI in the financial sector as part of the International Association of Insurance Supervisors (IAIS).

Open and ongoing dialogue and close cooperation between regulators, financial players and consumers will enable the financial sector to meet the challenges and seize the opportunities presented by AI.