Global Trustee and Fiduciary Services Bite-Sized Issue 9 2026

AI FSB Chair Warns of Risks Arising from Frontier AI Models On 31 August 2026, the Financial Stability Board (FSB) published a letter from its Chair, Andrew Bailey, to G20 Finance Ministers and Central Bank Governors ahead of their meeting in Asheville, North Carolina on 31 August and 1 September 2026. In the letter, the FSB Chair notes that the Middle East conflict has exacerbated energy-driven inflationary pressures and that markets remain vulnerable to a potentially disorderly correction that could spread across borders, particularly given fragilities in sovereign debt markets; vulnerabilities in private credit and stretched asset valuations (particularly artificial intelligence (AI)-related investments). The FSB Chair says that the recent increase in the use of leverage in equity markets is interacting with high valuations, market concentration and AI-related optimism in a way that could amplify a future market correction. The FSB Chair adds that the risk landscape has been further complicated by the emergence of frontier AI models, which are showing increasingly sophisticated autonomy and problem-solving abilities, as well as threat capabilities. The Chair adds that the most immediate concern is the potential impact of frontier AI on cyber risk. The FSB Chair calls on jurisdictions to take appropriate steps to support safe and responsible model release and deployment as a priority. For financial firms, the FSB Chair underlines the importance of robust response and recovery capabilities and resilience amongst critical third-party technology providers and other common service providers. Link to Letter here Hong Kong: First Cohort of GenA.I. Sandbox++ Announced On 27 August 2026, the Hong Kong Monetary Authority (HKMA), the Securities and Futures Commission (SFC), the Insurance Authority (IA), and the Mandatory Provident Fund Schemes Authority (MPFA), in collaboration with the Hong Kong Cyberport Management Company Limited (Cyberport), announced the first cohort of the Generative Artificial Intelligence (GenA.I.) Sandbox++. In its press release, the SFC says that from nearly 100 proposals received, 36 use cases have been selected for the first cohort of the GenA.I. Sandbox++, involving 30 financial institutions and 27 technology partners (see Annex) . The SFC explains that all the proposals were prioritised based on innovation, technical complexity and potential value to the financial industry, as well as advice provided by a selection committee comprising academic experts. The SFC says that this cohort will focus on agentic A.I. applications, and that the selected use cases go beyond content generation, further exploring how A.I. can responsibly take on greater autonomy. The SFC adds that the testing will cover end-to-end processes such as customer onboarding, payments, insurance claims and customer interactions. Investor Services Bite-Sized Global Trustee and Fiduciary Services Issue 9 | 2026 Quick Links AI CRYPTOASSETS EMIR FINTECH FUND LIQUIDITY OPERATIONAL RESILIENCE RETAIL INVESTMENT STRATEGY T+1 ASIA PACIFIC AUSTRALIA EUROPE NORTH AMERICA UNITED KINGDOM