AI Governance after MiFID II: Beyond (Mere) Technological Neutrality?

This article examines the evolving intersections between artificial intelligence (AI) and EU financial regulation, focusing on the Markets in Financial Instruments Directive II (MiFID II). Grounded in the principle of technological neutrality, MiFID II seeks to enhance investor protection, safeguard market integrity, and ensure that innovation develops within competitive and well-regulated markets across the Union. The article argues, however, that while this neutrality renders the framework functionally enabling, it also leaves it normatively silent in the face of the distinctive and evolving risks introduced by financial AI. As AI applications become increasingly heterogeneous—both across the financial functions in which they are deployed and in their underlying lifecycles and value chains—MiFID II’s activity-based logic increasingly struggles to accommodate their diverse and evolving risk profiles. Reflecting the EU’s broader shift toward risk-based AI governance, the article outlines an initial taxonomy of financial AI applications designed to guide the proportionate alignment of regulatory obligations with AI-related risks, thereby supporting the continued adaptability, coherence, and future-proofing of EU financial services law.