SEC Committee Discusses Proposed Regulation of Financial AI

Opinions differ regarding the purpose of regulation.

An advisory committee for the Securities and Exchange Commission (SEC) recently met to review the agency’s latest draft for a policy intended to mitigate investment brokers’ use of artificial intelligence (AI) for investment planning. Investment planning uses complex data to recommend stocks and other assets to individuals hoping to grow their long-term financial portfolio.

Current AI technology is generally used as a data aggregation and amalgamation tool. While it could be used by investment brokers seeking the best recommendations for their clients within seas of financial data, the use of AI in the financial sector poses a number of risks.

Investment brokers at the advisory meeting thought that the SEC’s draft regulating AI use in their field was too broad, curbing their access to additional information to feed to their AI algorithms. One expert claimed that the SEC’s current financial ethics policies could sufficiently curb unethical AI use.

Others in the industry said that regulations should be for the sake of the consumer and not financial brokers’ interests to impose these stronger AI regulations.

As the Lord Leads, Pray with Us…

  • For SEC Chair Gensler to be led by God as he heads the agency.
  • For industry leaders and experts as they provide input regarding the use of artificial intelligence in the investment sector.
  • For wisdom for U.S. financial and economic officials as they assess the benefits and risks of AI.

Sources: Investment News, Wall Street Journal


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