An Investigation into the Regulation of Artificial Intelligence in Financial Markets Using Organisational Responses and Legislative Barriers
DOI:
https://doi.org/10.31033/IJEMR/16.1.2026.1838Keywords:
Institutional Governance, Algorithmic Transparency, Financial Markets, Regulation of AIAbstract
The swift adoption of Artificial Intelligence has completely transformed how trading is conducted, how risks are managed, and the decisions made in financial markets. However, this transformation now raises significant financial and legal challenges. Issues such as market manipulation, clarity over algorithm transparency, ethical use of AI, and compliance with prevailing financial regulations have gained the attention of major concerns for businesses and governments. This work explores how legal frameworks around AI in financial markets change, including under international laws, methods to train the AI system, and how the rules are enforced. It also demonstrates how financial regulators can achieve market stability, protect investors, and ensure that AI is responsibly used. The paper addresses that regulation should be done in a way that is neither unfair nor one-sided, to accord substantial impetus to innovation at low risk.
Downloads
References
World Economic Forum. (2023). The future of financial services in the age of AI. Retrieved from: https://www.weforum.org
Deloitte Insights. (2023). AI in financial services: Trends and outlook. Deloitte Center for Financial Services.
OECD. (2022). Artificial intelligence in finance: Market developments and financial stability implications. OECD Publishing.
Statista. (2023). AI adoption in the financial services industry worldwide. Retrieved from: https://www.statista.com
PwC. (2022). AI in financial services: Global research survey. PricewaterhouseCoopers.
Author's Primary Survey. (2024). Institutional readiness and use of AI in financial markets, conducted between January and March 2024.
IOSCO. (2021). The use of artificial intelligence and machine learning by market intermediaries and asset managers.
BIS. (2022). Artificial intelligence and machine learning in financial services: Market developments and financial stability implications.
FATF. (2022). Opportunities and challenges of new technologies for AML/CFT.
European Commission. (2021). Proposal for a regulation on artificial intelligence (AI Act).
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 V.A. Ragavendran, R. Bhavesh Jain
This work is licensed under a Creative Commons Attribution 4.0 International License.
Research Articles in 'International Journal of Engineering and Management Research' are Open Access articles published under the Creative Commons CC BY License Creative Commons Attribution 4.0 International License http://creativecommons.org/licenses/by/4.0/. This license allows you to share – copy and redistribute the material in any medium or format. Adapt – remix, transform, and build upon the material for any purpose, even commercially.
