FIX Urges IOSCO to Build Global AI Standards Instead of…
The FIX Trading Community is calling for a globally coordinated approach to governing artificial intelligence in capital markets, arguing that regulators do not need to start from scratch because many of the controls required for agentic AI already exist in the industry’s approach to algorithmic trading.
In its response to the International Organization of Securities Commissions’ Supervisory Toolkit for AI Use in Capital Markets, FIX said the financial industry should build on established practices around algorithm testing, certification, governance and audit trails rather than allowing firms or jurisdictions to develop their own disconnected AI frameworks. The industry association believes that applying consistent global standards would reduce operational and market risks while allowing firms to continue adopting AI technologies.
Source: FIX Trading Community. IOSCO’s Supervisory Toolkit for AI Use in Capital Markets was published in May 2026 as a practical framework to help securities regulators supervise AI systems used by regulated firms. :contentReference[oaicite:0]{index=0}
AI Governance Is Becoming the Next Regulatory Battleground
The debate around artificial intelligence in financial markets has rapidly shifted beyond questions of productivity and automation. Regulators are increasingly focused on how AI systems are governed, monitored and tested before they influence trading decisions, investment recommendations or operational processes.
IOSCO’s supervisory toolkit reflects that change. Rather than introducing new regulations, the document provides securities regulators with a common framework for supervising AI adoption across governance, risk management, outsourcing, disclosure and recordkeeping. It is intended to create greater consistency among the more than 130 securities regulators that make up IOSCO while recognising that AI technologies continue evolving rapidly. :contentReference[oaicite:1]{index=1}
For the FIX Trading Community, however, the next challenge is ensuring that firms themselves are not forced to comply with multiple incompatible AI governance frameworks across different jurisdictions.
Lessons From Algorithmic Trading
FIX argues that financial markets already possess decades of experience managing automated decision-making through algorithmic trading, where testing, certification and governance have become standard industry practices.
Executive Director Jim Kaye said many of the concerns surrounding agentic AI mirror issues that firms have addressed for years when deploying automated trading systems.
“Many of the potential problems with agentic AI can be mitigated by ensuring appropriate testing, certification, and workflow oversight and record-keeping,” Kaye said.
Rather than designing entirely new governance models, FIX believes existing controls can be adapted for AI deployments, making implementation faster and more practical for firms already operating under established trading technology frameworks.
Kaye added that FIX has already completed much of the underlying work through its longstanding focus on algorithmic trading standards and is now developing deployment-ready practices specifically designed for AI systems.
From Best Practices to Global Standards
At the centre of FIX’s response is a recommendation that governance standards should be developed collectively by the industry rather than independently by individual firms.
The organisation’s AI Working Group, which includes both buy-side and sell-side participants, is advocating globally recognised standards covering agentic AI governance, testing and certification.
According to FIX, the group has already developed a cross-jurisdictional methodology for testing trading algorithms that includes scenario testing, interoperability assessments and evaluations of whether automated systems could contribute to market disorder. Those principles, it argues, translate naturally to AI-driven trading and operational systems.
That approach is particularly relevant as financial institutions increasingly experiment with generative and agentic AI capable of making or recommending decisions with limited human intervention. While many firms have established internal governance frameworks, regulators have repeatedly warned that inconsistent approaches could create operational, conduct and systemic risks if AI adoption accelerates across markets. :contentReference[oaicite:2]{index=2}
Why IOSCO Matters
Unlike national regulators, IOSCO does not create binding regulations. Instead, it develops internationally recognised principles that frequently shape domestic rulemaking across securities markets.
Its AI toolkit follows the same model. The report is designed to provide supervisors with practical questions, monitoring tools and oversight methodologies rather than mandatory rules, while also encouraging greater consistency between jurisdictions. IOSCO has also launched a broader review of emerging industry practices covering AI governance, disclosure, recordkeeping and reporting as it continues developing its international framework. :contentReference[oaicite:3]{index=3}
FIX believes that makes IOSCO the appropriate forum for developing globally consistent AI governance.
“Relying on fragmented, firm-specific approaches injects just the types of risk people worry about when it comes to AI,” Kaye said.
He added that IOSCO was “absolutely right” to place itself at the centre of the discussion, saying members of the FIX AI Working Group were keen to contribute practical industry standards that would support innovation without increasing risks to global financial markets.
AI Is Becoming Infrastructure Rather Than a Tool
The discussion also illustrates how AI regulation is evolving within capital markets.
Earlier debates largely focused on whether firms should use artificial intelligence. The conversation is increasingly centred on how AI systems should be governed once they become embedded within trading, execution, surveillance, compliance and operational workflows.
For organisations such as FIX, whose protocol underpins messaging across global financial markets, governance standards may ultimately prove as important as technical innovation. As AI becomes integrated into trading infrastructure rather than isolated productivity tools, consistency across jurisdictions could become critical for firms operating across multiple regulatory regimes.
The challenge for regulators will be balancing innovation with market integrity without creating overlapping compliance requirements that slow adoption or introduce new operational risks. FIX’s message to IOSCO is that many of those answers already exist within the market’s decades of experience supervising automated trading systems.