The Canadian Securities Administrators (CSA) have published CSA Staff Notice and Consultation 11-348 – Applicability of Canadian Securities Laws and the Use of Artificial Intelligence Systems in Capital Markets (the Staff Notice), intended to provide guidance on how securities legislation applies to the use of artificial intelligence (AI) by market participants.
Through the Staff Notice, the CSA is also seeking stakeholder feedback through consultation questions on the evolving role of AI systems and the opportunities to tailor or modify current approaches to oversight and regulation. The comment period ends on March 31, 2025.
The Staff Notice is divided into three parts:
- An introduction detailing general overarching themes that apply to the use of AI systems in capital markets across market participants.
- A section providing the Regulator’s guidance, referring to specific securities laws and how they apply to registrants, non-reporting issuers, marketplaces and marketplace participants, clearing agencies and matching service utilities, trade repositories, designated rating organizations and designated benchmark administrators that use AI systems in Canadian capital markets.
- A concluding section that includes the consultation questions to seek feedback from our stakeholders on the use of AI systems in capital markets.
With the publication of the Staff Notice, the regulator recognizes the importance of harmonizing its approaches to AI systems, providing market participants with greater regulatory certainty and to ease the regulatory and compliance burdens. The CSA is working with provincial and international regulatory bodies to monitor legislative and policy efforts related to AI and their impact on market participants. The regulator notes it will continue to identify and consider new use cases of AI systems in the capital markets as they evolve and work towards mitigating any associated risks.
CSA Staff Notice and Consultation 11-348 – Applicability of Canadian Securities Laws and the Use of Artificial Intelligence Systems in Capital Markets is available for download from the website of the Canadian Securities Administrators.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.
