Industry Slams SEC’s Proposed AI Rule
The U.S. Securities and Exchange Commission (SEC) faces stiff opposition from the financial industry over proposals regarding the use of artificial intelligence (AI) by investment advisor firms and broker-dealers. Thirteen trade groups said in a joint letter that the proposal suggests that the SEC is waging a war on technology. "The proposal is outright hostile to the use of technology," the groups said. "The onerous, and in some cases operationally unfeasible, requirements in the proposal would likely make firms opt out of deploying technological innovations to avoid the prohibitive costs of compliance." In July, the SEC proposed a rule to require broker-dealers and investment advisors to identify and mitigate conflicts of interest emerging from the use of AI, as well as to ensure that their algorithms and models operate in the best interests of investors.
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