07.26.23

Wall Street's Use of AI and Data Analytics Faces New SEC Rules

by: Lydia Beyoud

The U.S. Securities and Exchange Commission was set to release a plan on Wednesday to address conflicts of interest that can arise when financial firms use artificial intelligence (AI) to interact with clients. Under the proposal, companies would need to assess whether their use of predictive data analytics or AI poses conflicts of interest and then eliminate those conflicts, according to an SEC release. They would also have to beef up written policies to make sure they stay in compliance with the rule. The proposal is broader than existing requirements for brokers to act in their clients' best interests when making recommendations, an agency staffer said during a press briefing.

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