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ESMA Warning Letter on the Use of AI for Investing

  • Antonis Hadjicostas
  • Mar 25
  • 1 min read

Updated: Apr 3



ESMA

🔔 Legal / Regulatory Alert!


ESMA has issued a warning letter in connection to the use of Artificial Intelligence

for Investing, aiming to inform investments on what should know / what should be aware of.


🔊 Important Update for ALL investors!


📢 In brief


  • Use AI as a Tool, Not a Sole Resource: AI tools can provide investment suggestions, but they should not be the only resource for financial decisions. It’s vital to consider multiple perspectives and consult authorized professionals.


  • Be Wary of Promises: Avoid get-rich-quick schemes and be skeptical of AI tools promising high returns, as these claims are often unrealistic and misleading.


  • Regulatory Awareness: Publicly available AI tools are not regulated and do not have an obligation to act in your best interest, which increases the risk of poor investment decisions.


  • Understand Limitations and Risks: AI-generated advice can be based on outdated or inaccurate information. Predicting market movements is inherently risky, and human judgment remains crucial.


  • Protect Your Privacy: Do not share personal information with AI tools, as they may lack adequate security measures, putting your data at risk. Always prioritize your privacy when using these services.


❓ What should be aware of:




⛔ Why it Matters:


Client protection shall remain on top of the agenda of regulated entities as well as investors.

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