Proof of concept of AI models in market abuse detection - European Commission
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Strategy and policy
Reform Support

Proof of concept of AI models in market abuse detection

Supporting reforms to develop well-regulated, stable and competitive financial markets

Funding Programme
Year
  • 2023

Proof of concept of AI models in market abuse detection

The commission helped develop and implement AI models for market abuse detection, providing proof of concepts for six use cases. The support includes researching and developing use cases as well as delivering proof of concepts, with the expected result of enhancing market surveillance and regulatory efforts.

Context

The project supported by the European Commission aims to enhance market surveillance and regulatory efforts through AI models for market abuse detection. It aligns with EU policy priorities, particularly the Digital Transformation, by leveraging advanced data science techniques. Recognizing the evolving nature of financial markets, the project focuses on adapting supervisory tools to address changes driven by digitalization and emerging practices, including the use of AI. It addresses challenges in detecting market abuse patterns and aims to provide National Competent Authorities (NCAs) with enhanced tools for early detection and prevention.

Support Delivered

  • Who: The project is funded by the European Union and implemented by Accenture and Avanade, in cooperation with the European Commission, European Securities and Markets Authority (ESMA) and National Competent Authorities (NCAs).
  • What: The main activities include researching, developing use cases, and delivering six Proof of Concepts (PoCs) for AI models in market abuse detection, all carried out in close collaboration with NCAs to ensure alignment with their needs and expectations.
  • When: The project starts in September 2024 and is expected to conclude in August 2025. 
  • Where: The project leverages the ESMA Big Data Platform. 
  • Why: The aim is to enhance market surveillance and regulatory efforts through advanced AI models.

Results achieved

The project develops and implements AI models for market abuse detection, which will result in enhanced market surveillance and regulatory efforts. Beneficiaries -National Competent Authorities (NCAs), will gain tools enhancing their ability for early detection and prevention of market abuse. The expected improvement includes more efficient identification of suspicious activities, promoting fair and transparent financial markets. The project also fosters collaboration among stakeholders, ensuring effective communication and knowledge sharing.