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On April 13, 2026, the Netherlands Authority for the Financial Markets (AFM) published a sector report titled "AI in Capital Markets: Balancing Innovation and Integrity," addressing the opportunities and risks associated with artificial intelligence deployment in capital markets. The report identifies three key areas of concern. First, self-learning trading systems can create patterns resembling coordinated behaviour without explicit agreement between parties, as models mirror each other's price movements and amplify market volatility. A single faulty or defensive reaction from one model can rapidly spread without adequate controls, distorting price patterns beyond healthy market functioning. Second, trading models increasingly process not only prices but also news, market sentiment, and social media information, shifting potential manipulation from markets themselves to the data sources these models rely on. A single strategically distributed false report could theoretically trigger hundreds of algorithms within seconds without any misleading orders being placed. Third, the emergence of multi-agent technology alongside autonomous AI systems presents opportunities for increased speed and efficiency but requires careful implementation and appropriate risk management. The AFM emphasises that human involvement and clear accountability are critical to maintaining market integrity and public confidence. Market participants must remain agile enough to integrate new technological developments while establishing transparent decision-making processes, visible human oversight, and clearly defined responsibilities. The AFM commits to strengthening its supervisory capacity and internal expertise, translating identified risks into appropriate supervisory measures. The authority will continue dialogue with market participants and collaborate with national and international regulators to ensure a stable, future-proof market where innovation and control remain balanced. REFERENCES: https://www.afm.nl/en/professionals/nieuws/2026/apr/sectorbericht-ai-kapitaalmarkten

On April 13, 2026, the Dutch Authority for the Financial Markets (AFM) published its exploratory report titled "AI in Capital Markets: Balancing Innovation and Integrity," which addresses the opportunities and risks associated with the deployment of artificial intelligence in capital markets. The AFM presents how AI is reshaping every stage of the trading lifecycle - including pre-trade, execution and post-trade - and the opportunities this brings in terms of insight and efficiency. The study aimed to clarify where AI creates value in market functioning and to identify the risks that may arise as AI becomes embedded in trading systems. The report identifies three key areas of concern. Firstly, self-learning trading systems can generate patterns that resemble coordinated behaviour without there being any explicit agreement between the parties involved, as the models mirror each other's price movements and thereby amplify market volatility. Secondly, trading models are increasingly processing not only prices, but also news, market sentiment and social media information. This shifts the potential for manipulation from the markets themselves to the data sources on which these models rely. Thirdly, the emergence of multi-agent technology alongside autonomous AI systems offers the potential for greater speed and efficiency, but requires careful implementation and effective risk management. Market participants must be agile enough to integrate new technological developments while establishing transparent decision-making processes, visible human oversight, and clearly defined responsibilities. The AFM’s findings resulted in three main conclusions: Market integrity is shaped by human choices embedded in AI systems, particularly regarding model objectives and constraints, the context in which they operate, and the data they ingest. Risks emerge not only from individual models, but also from the environments in which they operate. Actors remain fully accountable for the outcomes of their systems, regardless of technological complexity. The AFM is committed to developing AI use in the sector by strengthening its supervisory capacity and internal expertise.

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Netherlands Financial Authority Publishes Report on Artificial Intelligence in Capital Markets

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Dutch Authority for the Financial Markets Publishes Report on Artificial Intelligence in Capital Markets