Legal Responsibility in Investment Decisions Using Algorithms and AI

This article provides an overview of the report released by a study group on legal issues regarding financial investments using algorithms/artificial intelligence (AI). The report focuses on legal issues regarding the automated or black-boxed financial investment decisions by using algorithms/AI. Sp...

Full description

Saved in:
Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Chiba, Makoto, Kashima, Mikari, Sekiguchi, Kenta
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2019
Subjects
Algorithms
Online AccessGet full text

Cover

More Information
Summary:This article provides an overview of the report released by a study group on legal issues regarding financial investments using algorithms/artificial intelligence (AI). The report focuses on legal issues regarding the automated or black-boxed financial investment decisions by using algorithms/AI. Specifically, the report discusses the points for consideration in applying laws regarding (1) regulations and civil liability issues surrounding business operators for investment management or investment advisory activities, and (2) regulations on market misconduct. The report shows that the application of some existing laws requires the presence of a certain mental state (such as purpose and intent), which is unlikely to be given in the case of investment decisions using algorithms/AI. To deal with this problem, the report considers the necessity of introducing new legislation.