Artificial Intelligence and Algorithmic Trading: Legal and Ethical Dimensions in Capital Market Governance
Keywords:
Algorithmic Trading, Artificial Intelligence Regulation, Securities Market Governance, Ethical AI and Transparency, Investor ProtectionAbstract
The concept of artificial intelligence technology with the fictitious global capital markets system has transformed finance. It can generate predictions based on a wide range of formal theories, makes choices extremely fast, and isn't hampered by people's emotions. However, the open governance of corporate systems presents serious ethical and legal issues as a result of this technical revolution. Fairness, transparency, and accountability are the three main lenses through which ethical aspects are
analyzed; human supervisors play a crucial role in automated decision-making. Additionally, governance approaches that may assist in striking a balance between new forms of investor trust and innovative technical solutions are discussed in the article. These concepts include ethical principles in AIs, algorithmic auditing trails (where computer programs are checked in simulations or on paper before becoming actual systems), and "sandboxes," which are regulated settings for risk testing. By combining the fields of law, finance, and technology ethics, this research aims to clarify how the modern capital market can maintain fair competition, resilience, and accountability. The report highlights the need for a proactive legal framework that holds algorithms accountable, promotes the standardization of ethical standards for AI, and highlights how crucial it is that technological advancements be in line with human values and justice for the sake of the market or security.
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