The International Organization of Securities Commissions (IOSCO) published today a Supervisory Toolkit for AI Use in Capital Markets.
The report provides regulators with a practical toolkit to support the supervision and oversight of Artificial Intelligence (AI) based systems used by regulated entities. The report is part of a phased approach to supporting securities markets authorities in considering appropriate regulatory and supervisory responses to AI in capital markets and the potential risks emerging from these technologies, including implications for investor protection, market integrity and financial stability.
Building on IOSCO’s previous work on AI1, the toolkit covers the full lifecycle of AI systems and applies across all system types, from traditional Machine Learning (ML) models to Generative AI (GenAI) and emerging Agentic AI techniques. As the use of these technologies expands across investment processes, risk management and operational functions, providing important benefits for firms and clients, they may also introduce or amplify risks related to complexity, reduced transparency, third-party dependencies and governance challenges.
The report sets out three complementary layers to support supervisory oversight, through:
- Potential risk areas in merit of supervisory consideration.
- Tools for supervisory oversight of key areas: governance and risk management; third-party and outsourcing risk management; disclosure; and recordkeeping and reporting,
- Indicators for monitoring AI adoption and use, alongside engagement methods to gather relevant information.
The report is complemented by a standalone extract of the toolkit designed for direct use in supervisory activities, including on-site examinations and inspections.
Following publication, IOSCO will turn its attention to emerging industry practices across governance, disclosure, and recordkeeping and reporting of AI systems in capital markets. To inform this review of industry practices, the report includes a survey, which is open until 26 June. IOSCO will also continue to play a coordinating role in addressing AI developments in capital markets and to engage with other relevant international organizations, including the Financial Stability Board (FSB)
In light of recent developments in AI enabled cyber capabilities, IOSCO notes that they may materially accelerate threat evolution and increase the speed, scope, and scale of existing attack techniques. IOSCO is therefore examining how such AI driven cyber risks, and the need for more continuous assessment and remediation, should be reflected in its ongoing work on AI in financial markets. Financial market participants should remain vigilant to such risks and take timely, proactive steps to identify and remediate vulnerabilities.
“The increasing integration of artificial intelligence into capital markets requires supervisors to have practical and proportionate tools to assess emerging risks while supporting innovation and safeguarding market integrity and investor protection.”
- Jean-Paul Servais, IOSCO Board Chair
“The toolkit reflects IOSCO’s continued commitment to strengthening supervisory approaches in response to rapidly evolving technologies. It provides practical guidance to help authorities address the risk arising from the growing use of AI systems across financial markets.”
- Hanzo van Beusekom, Chair of IOSCO’S Fintech Task Force (FTF) and Member of the Executive Board of the Dutch Authority for the Financial Markets (AFM)
“The toolkit marks an important milestone, culminating two years of work by the Fintech Task Force. It is a significant step to strengthen supervisory readiness among capital market supervisors and represents IOSCO’s continuous effort to support robust oversight while facilitating responsible innovation.”
- Lim Tuang Lee, Former Chair of IOSCO’S Fintech Task Force (FTF) (March 2022- April 2026) and Assistant Managing Director, Capital Markets Group, Monetary Authority of Singapore
