Regulations surrounding artificial intelligence (AI) are increasingly under scrutiny by jurisdictions and securities regulators, though formal requirements remain sparse. The EU Artificial Intelligence Act, effective from August 1, 2024, enforces regulations based on AI risk levels, emphasizing risk management, data governance, and human oversight. The Securities and Exchange Commission (SEC) has yet to finalize AI rules but expects companies to disclose material risks related to AI use, warning against misrepresentation. In Canada, a voluntary code for generative AI and guidance from the Canadian Securities Administrators (CSA) align existing laws with AI practices. Audit committees are tasked with ensuring compliance as regulations evolve. The Canadian Public Accountability Board (CPAB) advises companies to balance innovation and risk in AI governance. While AI presents significant risks, embracing its potential is crucial for organizations moving forward. Overall, effective management of these regulatory challenges is vital for success in leveraging AI technology.
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