IDEAS home Printed from https://ideas.repec.org/p/boj/bojlab/lab19e01.html
   My bibliography  Save this paper

Legal Responsibility in Investment Decisions Using Algorithms and AI

Author

Listed:
  • Makoto Chiba

    (Bank of Japan)

  • Mikari Kashima

    (Bank of Japan)

  • Kenta Sekiguchi

    (Bank of Japan)

Abstract

This article provides an overview of the report released by a study group on legal issues regarding financial investments using algorithms/artificial intelligence (AI). The report focuses on legal issues regarding the automated or black-boxed financial investment decisions by using algorithms/AI. Specifically, the report discusses the points for consideration in applying laws regarding (1) regulations and civil liability issues surrounding business operators for investment management or investment advisory activities, and (2) regulations on market misconduct. The report shows that the application of some existing laws requires the presence of a certain mental state (such as purpose and intent), which is unlikely to be given in the case of investment decisions using algorithms/AI. To deal with this problem, the report considers the necessity of introducing new legislation.

Suggested Citation

  • Makoto Chiba & Mikari Kashima & Kenta Sekiguchi, 2019. "Legal Responsibility in Investment Decisions Using Algorithms and AI," Bank of Japan Research Laboratory Series 19-E-1, Bank of Japan.
    • Handle: RePEc:boj:bojlab:lab19e01
    as

    Download full text from publisher

    File URL: http://www.boj.or.jp/en/research/wps_rev/lab/lab19e01.htm
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    algorithm; artificial intelligence; AI; investment decision; duty to explain; duty of due care of a prudent manager; market manipulation; insider trading;
    All these keywords.

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boj:bojlab:lab19e01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bank of Japan (email available below). General contact details of provider: https://edirc.repec.org/data/bojgvjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.