European Union: On December 9, 2023, EU lawmakers came to a provisional agreement on the EU Artificial Intelligence (AI) Act, a global first for a regulatory framework dedicated to artificial intelligence. The proposed regulation will be risk-based, with specific rules for each risk level category. EU lawmakers and experts were set to reconvene last week, as part of a series of multiple technical meetings, to set out the details of the proposed Act. Implementation of the regulation is expected in 2026.

Also of interest: European Parliament press release on AI Act.

UK: In contrast, on December 12, 2023, while addressing parliament during a session of the Treasury Select Committee, the Financial Conduct Authority (FCA) emphasized that a measured response to AI regulation in finance is appropriate. In opposing a rushed approach and immediate adoption of comprehensive AI regulation, the FCA stressed the AI is a rapidly evolving area, the implications of which are not yet entirely understood, and AI regulation should be approached with “caution and humility”. The FCA also suggested that the UK is more favourably placed compared with some of its major global competitors, due to its existing regulatory framework, under which its set of rules ensures market integrity and protects consumers, as well as equips financial firms with the ability to address AI-related issues.

Also of interest: No rush to write bespoke rules for AI in finance, says UK watchdog

What Else?: On December 6, 2023, the Bank of England announced that in 2024 it will “consider the financial stability risks of AI and ML” (machine learning), as it warned that AI could pose risks to the UK’s financial stability, given rapid developments in the field.