The Canadian Securities Administrators (CSA) have published a notice to clarify how securities legislation applies to the use of artificial intelligence (AI) systems in capital markets.
The notice, titled “Staff Notice and Consultation 11-348: Applicability of Canadian Securities Laws and the Use of Artificial Intelligence Systems in Capital Markets,” also seeks stakeholder input on how to adapt current regulatory approaches to address the rapid evolution of AI.
“The rapid evolution of AI provides opportunities and challenges for Canadian capital markets,” said Stan Magidson, chair of the CSA and Chair and CEO of the Alberta Securities Commission. “Our goal is to support responsible innovation that benefits investors and market participants, while addressing risks associated with the use of these systems.”
The notice offers guidance to registrants, reporting issuers, marketplaces, and other market participants using AI systems. It emphasizes the importance of transparency, accountability, and risk mitigation to maintain a fair and efficient market. The CSA underscored that the guidance is rooted in existing securities laws and does not impose new legal requirements.
Grant Vingoe, CEO of the Ontario Securities Commission, emphasized the CSA’s commitment to fostering trust and competitiveness in Canadian markets, statring “We are committed to providing market participants with clarity on the responsible use of AI systems to ensure Canadian capital markets remain competitive and secure.”
“This consultation is an important step in fostering trust and transparency as AI systems continue to reshape the capital markets landscape,” Vingoe added.
The CSA is seeking feedback on the evolving role of AI in capital markets and potential regulatory adjustments. Consultation questions are available on CSA members’ websites, and the comment period is open until March 31, 2025. According to CSA, stakeholder responses will help shape future regulatory initiatives to ensure AI systems are integrated responsibly into the capital markets framework. By providing clarity and soliciting input, the CSA aims to balance the benefits of AI innovation with the need to address associated risks.