Concerns percolate about how SEC’s AI proposal aligns with Reg BI
July 27, 2023 | Mark Schoeff Jr. | Investment News
An SEC proposal to eliminate conflicts of interest in financial advisors’ use of technology that predicts investor behavior is raising concerns about how it will work with Regulation Best Interest.
A split Securities and Exchange Commission voted 3-2 Wednesday to release a proposal for public comment that would require brokerages and investment advisory firms to “eliminate or neutralize” conflicts related to conducting investor interactions through artificial intelligence, predictive data analytics and similar technology.
The proposal is designed to address situations where the technology places the firm’s or an advisor’s interests ahead of the interests of investors by optimizing client or customer behavior to purchase certain investments, deploy strategies or make other decisions.
