EU Market Abuse Regulation and AI use cases

Depends on design under the EU AI Act

The tier depends on how the system is used, for example whether it decides on access to an essential service.

• AI assistant for deal sourcing and M&A due diligence

  Decision support for professional investors and advisers about companies is not a use listed in Annex III and is not a practice prohibited by Article 5. The users are deal professionals who know they are working with an AI tool, and no consumer interacts with it, so the Article 50(1) duty to disclose an AI interaction has little practical effect. Article 50(2) is different: a firm that builds the assistant itself, including on a platform such as Blits.ai and putting it into service under its own name, is the provider of that system and must mark generated text in a machine readable format, unless the system only performs an assistive function for standard editing or does not substantially alter the input data or its semantics, which may cover extraction and redaction. A firm that instead licenses a vendor product, such as Datasite or Rogo, should confirm that the vendor meets this duty. Obligations are otherwise general: AI literacy for the deal team under Article 4 and, where personal data in the data room is processed, the GDPR.

• AI for market abuse surveillance alert triage

  Surveillance of orders and transactions as such is not listed in Annex III. Where the system monitors and evaluates the behaviour of the firm's own staff, in their communications or their trading, it can fall under Annex III point 4(b) (AI used to monitor and evaluate the performance and behaviour of persons in work relationships), so the tier depends on whether the system scores individual employees. Inferring employees' emotions from biometric data such as voice recordings is prohibited in the workplace under Article 5(1)(f).

• AI summaries of investment research and the house view

  Summarizing research for staff is not an Annex III use and is not a practice prohibited by Article 5, so the tier turns on the firm's role under Article 50. It is minimal for a purchased internal tool with no client or public facing exposure. Article 50 transparency applies when the firm builds the generating system itself, which brings the Article 50(2) duty to mark synthetic text in a machine readable format; when the assistant is offered to clients as a chatbot, which brings the Article 50(1) duty to tell them they are interacting with AI; or when AI generated text is published to inform the public on matters of public interest, which brings the Article 50(4) disclosure duty unless the text has gone through human review or editorial control and a person holds editorial responsibility for it.