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“AI and sustainability - cure or curse?”
While AI can help resolve data issues in sustainable investing, it can create problems such as information breaches and inherent bias in data.
United Kingdom | Publication | January 2020
Financial institutions frequently face claims by their clients. In this article, we highlight a new argument originating in breach of contract claims by individuals against regulated firms and linked to the standard set out by regulatory rules.
Claims against regulated firms often involve allegations that the firm failed to give sufficient information about the risks of a transaction, or that it undertook to advise the client but failed to provide accurate advice, and they are based on misrepresentation, breach of contract, negligence and breach of fiduciary duty. Sometimes, they also include a claim for breach of FCA rules – in particular, damages for breach of statutory duty under section 138D of the Financial Services and Markets Act 2000 (FSMA).
In turn, a claim under section 138D usually relies on a breach of the FCA’s Conduct of Business Sourcebook (COBS), which has the status of delegated legislation. Reliance on COBS brings significant advantages for clients (especially retail clients who benefit from the highest level of protection), because of the specific obligations imposed on firms by the FCA. For instance, regulated firms have a duty to communicate in a way that is fair, clear and not misleading, a duty to consider the suitability of investments if the firm is providing investment advice, and a duty to disclose commissions.
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Publication
While AI can help resolve data issues in sustainable investing, it can create problems such as information breaches and inherent bias in data.
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In this edition of Regulation Around the World we review recent steps that financial services regulatory authorities have taken as regards investment research.
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We have had a new pension tax regime since April 6, 2024. The underlying legislation is convoluted and almost impossible for a lay person to follow, so you would be forgiven for thinking there was a lot to study. At the very granular level that is true, and your scheme administrators will have a lot of detailed changes to make to systems. However if you zoom out a bit, in many ways life hasn’t changed. We’ve done the poring over densely amended tax legislation for you. Here are the highlights: five things to know and three things to do.
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