Asset managers are using AI to screen investments, draft investor reports, monitor trades and answer due diligence questionnaires. Regulators have mostly chosen not to write AI-specific rules for them. They have made clear that existing rules apply.
United Kingdom
The FCA has said it does not plan AI-specific rules. Its existing framework covers AI: the Principles for Businesses, the Consumer Duty for retail-facing firms, systems and controls, and the Senior Managers and Certification Regime, under which a named senior manager is accountable for the area where AI is used.
European Union
ESMA has said that firms using AI in investment services remain responsible under MiFID II for acting in clients’ best interests. DORA, which has applied since January 2025, treats AI suppliers as ICT third-party providers, with contract, register and exit requirements. Under AIFMD, using an outside AI tool for a core function can raise delegation questions. The AI Act’s high-risk categories mostly do not cover investment decisions, but they do cover creditworthiness assessment, and its transparency duties apply to client-facing chatbots.
United States
The SEC withdrew its proposed rule on predictive data analytics in 2025. Advisers remain subject to fiduciary duty and the marketing rule, and the SEC has brought cases against firms for overstating their use of AI, known as “AI washing”.
For a fund manager, the AI question a regulator will ask is the outsourcing question it has always asked: do you understand it, control it and can you exit it?
What to do
Add AI tools to the outsourcing and ICT third-party register, assign a senior owner, and check that marketing materials describe your use of AI accurately.
This article is general information on the law as at November 2026. It is not legal advice and has not been updated since that date. See the terms of use.