Page 29 - 期货和衍生品行业监管动态（2023年8月刊）

期货和衍生品行业监管动态

Written Reply to Parliamentary Question on Impact of Artificial Intelligence on

Trading Platforms in Financial Markets (2023/8/2)

Question:

To ask the Prime Minister whether MAS has assessed the impact of artificial

intelligence (AI) on trading platforms in financial markets for (i) the risk of “herding”

where individual actors make similar decisions due to similar trained AI models or

similar data aggregates and (ii) the potential for conflict of interest when a trading AI

platform system is simultaneously considering both the platform’s interest and the

customers’ interests, especially if without disclosure to customers.

Answer by Mr Lawrence Wong, Deputy Prime Minister and Minister for

Finance, and Chairman of MAS:

MAS requires regulated financial institutions (FIs) to have controls in place to

avoid or mitigate conflicts between their interests and those of their customers. This

approach is technology-neutral and is applied across all regulated FIs.

As early as 2018, MAS introduced the FEAT Principles to guide FIs’ responsible

use of Artificial Intelligence and Data Analytics (AIDA) in their products and services.

FEAT is an acronym for Fairness, Ethics, Accountability, and Transparency. Amongst

other things, these principles require FIs to ensure that AIDA adoption does not result

in customers being treated less fairly than the business. FIs are also required to provide

customers transparent disclosures on the FI’s products and services, to facilitate

informed decision making.

The risk of herding in trading platforms arising from the use of AI models is

currently assessed to be low as FIs in Singapore are still at a nascent stage of using AI

models for decision-making. Nevertheless, MAS continues to carefully monitor and

assess the risks brought about by AI in financial markets. In recent years, MAS has

worked with the industry to develop a framework which enables FIs to evaluate their

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