Joint forum of financial market regulators examines the impact of AI and innovations

Experts discussed the dual nature of AI and its potential to revolutionize financial markets
Joint forum of financial market regulators examines the impact of AI and innovations

The Joint Forum of Financial Market Regulators convened its annual meeting on April 10, gathering key regulatory bodies, including the Canadian Securities Administrators (CSA), the Canadian Council of Insurance Regulators (CCIR), and the Canadian Association of Pension Supervisory Authorities (CAPSA).

The event, hosted by Lise Estelle Brault, chair of the CSA Financial Innovation Hub, focused on integrating artificial intelligence (AI) in financial markets and its implications for regulation and product development.

During the meeting, experts discussed the dual nature of AI technologies, highlighting their potential to revolutionize financial markets with innovative products and services while also introducing new risks and governance challenges.

Stan Magidson, chair of the CSA and CEO of the Alberta Securities Commission, emphasized the regulatory commitment to ensuring that AI developments enhance market efficiency without compromising fairness or consumer protection. "As regulators, we will maintain fair and efficient capital markets and remain vigilant in promoting the responsible development of AI in finance," Magidson stated.

Luc Sirois, chief innovator and president of the Government of Québec’s Council of Innovation, addressed the need for greater inter-disciplinary collaboration to bridge the gap between technological advancement and practical application in the financial sector. He pointed out the disruptive potential of digital transformation, stressing the importance of enhanced partnerships between government and business to navigate the rapid pace of technological change.

The meeting also provided a platform for updates on significant cross-sectoral initiatives, including the Total Cost Reporting (TCR) reforms. These reforms are designed to increase transparency for investors and policyholders regarding the ongoing costs associated with investment funds and segregated fund contracts.

Angela Mazerolle, CAPSA chair and vice-president of regulatory operations with the New Brunswick Financial and Consumer Services Commission, stated, “CAPSA continues to support the important work of the Joint Forum and the sharing of information between the member organizations.  We were pleased to report on our work in updating the 2004 Guidelines for Capital Accumulation Plans, originally developed by the Joint Forum, with the intention to have this important updated Guideline finalized this summer.”

Huston Loke, CCIR chair and executive vice president of market conduct at FSRA, highlighted the consumer protection benefits of the TCR project, remarking, "Consumers are better protected when the performance and costs of the funds they own are disclosed on a consistent and harmonized basis."