A new publication from the UK’s financial regulator signals to firms that they should take steps to manage risks in the use of AI.

By Stuart Davis, Fiona M. Maclean, Gabriel Lakeman, and Imaan Nazir

The UK’s Financial Conduct Authority (FCA) has published its latest board minutes highlighting its increasing focus on artificial intelligence (AI), in which it “raised the question of how one could ‘foresee harm’ (under the new Consumer Duty), and also give customers appropriate disclosure, in the context of the operation of AI”. This publication indicates that AI continues to be a key area of attention within the FCA. It also demonstrates that the FCA believes its existing powers and rules already impose substantive requirements on regulated firms considering deploying AI in their services.

The UK government is taking further measures to tackle economic crime in the UK, reforming its corporate register, and giving extra powers to the Serious Fraud Office.

By Stuart Alford KC, Clare Nida, and Mair Williams

The UK has published the new Economic Crime and Corporate Transparency Bill 2022 (the Bill), which focuses on reforms to Companies House, the role of limited partnerships, seizure of suspected criminal cryptoassets, and new intelligence gathering powers for law enforcement.

In March 2022, the Economic Crime (Transparency and Enforcement) Act 2022 (the Act) created a new register of overseas entities holding UK property assets alongside changes to the unexplained wealth order and sanctions regimes (see previous Latham blog). The Act was passed in response to the Russian invasion of Ukraine and targeted Russian assets held or flowing through the UK. At the time of the Act in March, the UK government said a second part would follow, and the Bill, published in September 2022, sets out the plans for that second part.

The latest analysis of “smarter contracts” provides helpful guidance on the opportunities and potential legal and practical risks in adopting these technologies.

By Christian F. McDermott, Andrew C. Moyle, and Nara Yoo

LawtechUK’s latest analysis of so-called smarter contracts in the UK, set out in its Smarter Contracts Report (the Report), seeks to identify how technology is transforming contract practices, and to explore future opportunities and innovation. The Report defines a “smarter contract” as a legally binding digital contract, including legally enforceable contracts in which some or all of the terms are represented in code, and identifies a range of smart contract applications, from simple electronic signatures to sophisticated self-executing contracts.