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ARTICLE · 03 DECEMBER 2024

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Hong Kong SFC Issues Circular On The Use Of Generative AI Language Models

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The Hong Kong Securities and Futures Commission (SFC) has issued a circular that sets forth comprehensive guidelines and expectations for licensed corporations (LCs) regarding the responsible use...

Hong KongTechnology
Anna Gamvros
Anna Gamvros
Agnes Tsang
Agnes Tsang
Ruby Kwok
Ruby Kwok
Chun Bun (Edward) Yau
Chun Bun (Edward) Yau
Jennifer Yu
Jennifer Yu
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The Hong Kong Securities and Futures Commission (SFC) has issued a circular that sets forth comprehensive guidelines and expectations for licensed corporations (LCs) regarding the responsible use of generative artificial intelligence language models (AI LMs).

This circular, accompanied by an appendix detailing a non-exhaustive list of risk factors, aims to ensure the responsible adoption and management of AI LMs. The full circular can be accessed here.

Scope and Applicability

The circular is applicable to all LCs that offer services or functionalities powered by AI LMs or use AI LM-based third-party products in relation to their regulated activities, irrespective of whether the AI LM is developed internally, by a group company, an external service provider, or sourced from open platforms. The SFC's directive underscores the importance of a risk-based approach, allowing LCs to tailor their compliance efforts based on the materiality and risk level of specific AI

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