10.16.23

Schwab, Ameriprise, Morgan Stanley Add to Gripes over SEC’s AI Rule

by: Briana Monsanto

As the comment period for the U.S. Securities and Exchange Commission's (SEC) predictive data analytics rule came to an end last week, industry players voiced reservations regarding the proposed rule. In its letter to the SEC, Charles Schwab General Counsel Peter Morgan contended that the rule as written would be “vulnerable to legal challenges,” and would raise free-speech concerns in its regulation of technology-assisted communications. Fidelity Investments, which urged the Commission to withdraw the proposed rule in a separate letter, said the proposal was “fatally flawed” and had an “unworkable” framework. Morgan Stanley, meanwhile, focused its concerns around the unintended consequences the rule may have on clients and investors in its own letter to the agency. Ameriprise Financial echoed industrywide concerns around what would fall under the SEC’s “covered technology” definition and called into question the necessity of an additional rule to govern emerging technology beyond existing fiduciary and Regulation Best Interest standards.

Read the full article on Financial Advisor IQ