financial regulatory

Subscribe to financial regulatory
Stock-Images-Conceptual-Innovation-Lit-Lightbulb-669x477

A new publication from the UK’s financial regulator signals to firms that they should take steps to manage risks in the use of AI.

By Stuart Davis, Fiona M. Maclean, Gabriel Lakeman, and Imaan Nazir

The UK’s Financial Conduct Authority (FCA) has published its latest board minutes highlighting its increasing focus on artificial intelligence (AI), in which it “raised the question of how one could ‘foresee harm’ (under the new Consumer Duty), and also give customers appropriate disclosure, in the context of the operation of AI”. This publication indicates that AI continues to be a key area of attention within the FCA. It also demonstrates that the FCA believes its existing powers and rules already impose substantive requirements on regulated firms considering deploying AI in their services.

Regulator clarifies that existing FCA rules will continue to apply but will also reflect the evolving landscape of financial promotions on social media.

By Nicola Higgs, Stuart Davis, Fiona Maclean, Gabriel Lakeman, and Gary Whitehead

On 17 July 2023, the FCA published a guidance consultation (GC23/2) relating to financial promotions on social media.

Acknowledging that social media is “being used by many consumer as a go-to source of information”, the FCA is updating its existing guidance on social media and customer communications to take into account the changing landscape of social media. The existing guidance, FG15/4: Social Media and Customer Communications, will be retired once the new guidance is finalised.

A new white paper explores jurisdictional conflicts and the regulatory status of digital assets.

By Yvette D. Valdez, J. Ashley Weeks, and Jacqueline M. Rugart

Members of the American Bar Association’s (ABA’s) Derivatives and Futures Law Committee recently published a white paper exploring the US regulatory landscape for digital assets (White Paper), including a 50-state survey and overview of certain non-US crypto regulatory regimes. The White Paper primarily focuses on the jurisdictional overlap between the US Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) pertaining to the regulation of digital assets.

Latham & Watkins lawyers previously discussed the intersection of CFTC and SEC regulatory jurisdiction in the crypto context here and here.

Many auto advisers and automated discretionary investment managers risk poor outcomes for customers by falling short of FCA expectations.

By Nicola Higgs and Brett Carr

The Financial Conduct Authority (FCA) has issued a statement outlining its expectations of firms providing automated online discretionary investment management (ODIM) services and retail investment auto advisers (auto advisors). The FCA uses its statement to remind firms that the regulator’s rules, including those in relation to suitability and advice, apply equally to services regardless of the medium through which they are offered. Current providers and planned new market entrants should heed the warnings and the learnings of this statement.