RWS Legal’s Post

💼 Dive into the dynamic landscape of #ArtificialIntelligence and its impact on the legal framework across APAC! 🌏 From China's pioneering efforts to evolving regulations, here are some key insights from the latest Clifford Chance report. 📝 🇨🇳 China leads the pack with steadily implemented rules for #ResponsibleAI, covering everything from combatting 'deepfakes' to overseeing recommendation algorithms and, most recently, delving into measures governing #generativeAI service provision. 🚀 🇯🇵 Meanwhile, Japan is yet to establish AI-specific legislation but may see statutory regulations in the future, shaping the trajectory of AI governance in the region. 📈 🇦🇺 Down under in Australia, the approach leans towards soft-law and principles-based strategies, with no dedicated legislative regime specifically regulating AI as of now. 🌊 💡Singapore steps up its game with the Monetary Authority of Singapore (MAS) introducing the FEAT principles – emphasizing #fairness, #ethics, #accountability, and #transparency – for responsible AI and #dataanalytics in financial products and services since November 2018. 🏦 Explore the intersection of #Bigdata, #AIbias, and #AIEthics as APAC navigates through the evolving landscape of #Fintech, #Finserv, and regulatory frameworks! 🛠️ #Regulation #Regtech #ai4good #aitrust #Banking #ailegislation More Contents: Woongsik Dr. Su, MBA

Last week, the Hong Kong Securities & Futures Commission issued a circular on the use of Generative AI language models by securities intermediaries and asset managers with 4 core principles within its risk-based approach: (1) Senior management responsibilities (2) AI model risk management (3) Cybersecurity and data risk management (4) Third Party Provider risk management It is heartening that this #SFC circular reflects the regulatory approach that Ross Buckley, Dirk Zetzsche Douglas Arner and I advocated in our article on "Regulating Artificial Intelligence in Finance: Putting the Human in the Loop" through personal responsibility regimes in 2021 (ie, before the public release of ChatGPT and #GenAI in November 2020!). BTW - I now call this approach "Humans Working In The Loop". Fast forward today, some in the industry are concerned that the prescriptive nature of some aspects of the #SFCcircular may disincentize product and process innovation in Hong Kong's #securities and #assetmanagement sector, the same way some are concerned the EU AI Act and other legislation is negatively impacting introduction of innovative AI products into the EU (eg, Apple, Meta announcements). Indeed, this now has significant implications for the need to #upskill #seniormanagers in #AI at such firms in Hong Kong involved in #investmentbanks #equities #fixedincome #derivatives #virtualassets #familyoffices While this may imply short term costs (esp where functions such as model validation may be conducted by the global group level abroad and/or a third party provider's AI language model and/or data, currently likely originating from the US or Mainland China), it also provides a lever to increase local (and attract international) #talent to #Hongkong in AI development and deployment. These requirements may in fact benefit the #fintechs who are already digital native and regulatorily savvy. For now, since the circular takes immediate effect and requires licensed companies to "critically review their existing policies, procedures and internal controls to ensure proper implementation of, and full compliance with, the requirements in this circular", there is much work ahead for many Hong Kong licensed companies. Perhaps Hong Kong licensed securities and asset management firms may benefit from an industry-wide initiative to help raise the bar on #AIskills #AIgovernance and #bestpractices especially amongst the smaller players? Links to the SFC circular and our 2021 article published in the Sydney Law Review in the links below

GenAI legal framework in China is fast-evolving, partly in response to the dynamic AI R&D and vast market demands. While the China GenAI regulation shares in common with their counterparts globally in terms of transparency, non-discrimination, IP concerns etc., there are also China-specific rules such as the upfront approval mechanisms. This country-specific Q&A hopefully will bring to you an overview of Artificial Intelligence laws and regulations applicable in China from a comparative law perspective.

The Hong Kong government is set to release its first policy statement regarding the application of artificial intelligence (AI) in the finance sector. This initiative aims to promote the integration of AI technology in various financial areas, including trading, investment banking, and cryptocurrencies. The Financial Services and Treasury Bureau is currently working on a framework of guidelines, addressing ethical considerations and general principles for using AI within finance. The drafting process involves gathering feedback from industry stakeholders, and the final details of the document are still being refined and may change over the coming weeks. While the specifics of the policy statement remain unclear, its overall objective is to demonstrate Hong Kong's commitment to supporting AI development, in line with global efforts to understand and harness the technology's potential in the financial industry. #AI #Japan https://lnkd.in/gBg3_nyk

When a decision is made via artificial intelligence, the reasons for the decision are often said to be unknown, hidden inside a black box of calculations unfathomable to the human eye. In a panel discussion at day 2 of Tech Sauce entitled "Regulations VS Innovation" about developing safe AI, Chief FinTech Officer of the Monetary Authority of Singapore, Sopnendu Mohanty, talked about Project Veritas, and Singapore's efforts to apply FEAT principles to the financial services industry: Fairness, Ethics, Accountability and Transparency. He talked about the need for the public and private sectors to share the risk involved in AI implementation, understand the use cases, develop assessment methodology and toolkits and test out solutions in sandboxes, as the Singapore government has done with over twenty financial services and tech companies. He emphasized how important it is for the government to put budget behind these initiatives and signal to the private sector that collaboration to ensure FEAT is essential. #MAS #FEAT #AISAFETY #TechSauce

From #capitalrequirements updates by the #FederalReserve in the US to enhanced #AML guidelines in the Philippines, and from new #governance standards in Luxembourg to revised #Basel III implementation guidance in Hong Kong, this week’s regulatory updates cover critical changes worldwide. These updates reflect the evolving landscape of global financial regulation, emphasizing the need for institutions to stay informed and compliant with new standards to maintain stability and competitiveness in an increasingly complex environment. Read the complete blog here: https://lnkd.in/duSgUksb #FinregE #AI #Horizonscanning #regulatoryupdate #regulation

Very interesting to see Hong Kong Monetary Authority (HKMA)'s Recent Release on #GenAI in Financial Services – A Must-Read. The key points covered are centred around: 1. AI Innovation and Risk Management – the importance of fostering innovation within a well-structured risk management framework, ensuring that adoption is both innovative and responsible. 2. Practical Use Cases – It dives into how financial institutions are leveraging GenAI for internal efficiencies (like automating low-value tasks) and customer-facing solutions, all while addressing challenges like information overload and human error. 3. The GenAI Sandbox – An exciting initiative by HKMA, this Sandbox offers a risk-controlled environment for banks to experiment with and pilot GenAI use cases, while receiving supervisory feedback. If you are involved in #banking #Fintech, #AI, or financial services, this paper is a must-read because it provides practical insights and a regulatory roadmap to harness the full potential of GenAI. Also a great model for other governments such as The State Bank of Vietnam to learn from. #MAS #Singapore #HongKong #chuyendoiso #digitaltransformation #regulatory #framework

Hong Kong Launches AI Policy for Finance and Considers Tax Breaks on Digital Assets  📈 Hong Kong launches its first AI policy guidelines for the finance sector and proposes tax incentives for digital assets! Discover how these strategic moves aim to enhance Hong Kong's position as a leader in financial innovation and attract more investment in virtual assets. 🌐💡  #HongKongFinance #AIGuidelines #DigitalAssets #FinanceInnovation #TaxIncentives  #AIinFinance #HongKongFintechDevelopments #DigitalAssetLegislationHongKong #AITechnologyAdoption Read more 👇 https://lnkd.in/gGK99QZG

🌐 𝗡𝗮𝘃𝗶𝗴𝗮𝘁𝗶𝗻𝗴 𝗚𝗹𝗼𝗯𝗮𝗹 𝗔𝗜 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻: 𝗔 𝗧𝗮𝗹𝗲 𝗼𝗳 𝗧𝘄𝗼 𝗔𝗽𝗽𝗿𝗼𝗮𝗰𝗵𝗲𝘀 As #AI technology continues to advance, regulatory approaches vary significantly across regions. In Southeast Asia, regulators are adopting a 'light touch' approach to encourage innovation and growth, while China and the EU are imposing more stringent regulations to address risks and enforce accountability. This divergence creates both opportunities and challenges for companies operating across borders. 💡 RWS Legal specialises in global compliance and cross-border legal translation, helping businesses adapt their #AI policies to meet regulatory standards in any jurisdiction. ✉️ Connect with RWS Legal to ensure compliance and build trust in every market: https://lnkd.in/eHghRqjz. #RWS #RWSLegal #AIRegulation #GlobalCompliance #LegalTranslation #AIInnovation #DataPrivacy

Incorporating International AI Standards Into Contracts The EU's "AI Act" and expanding trade laws highlight the need for precise contracts with overseas entities, ensuring minimal risk, enhanced transparency, and trust in agreements. Reference : https://lnkd.in/gnTC_JRR #EUAIAct #InternationalTrade #ContractPrecision #RiskManagement #TransparencyInContracts #TrustBuilding #LegalCompliance #AIIntegration #GlobalBusiness #TradeAgreements