Several major law firms have expressed concern that a proposed U.S. Securities and Exchange Commission rule seeking to restrict robo advisers’ use of artificial intelligence is overbroad.
The proposed rule aims to address conflicts of interest that occur when broker-dealer and investment advisers use predictive data analytics in investor interactions. Firms have begun using technologies, such as predictive data analytics or artificial intelligence, to increase market access, efficiency and returns. The agency said the proposal is aimed at preventing retail and self-directed investment platforms from placing their own interests above investors’ interests
The proposed SEC rule would require specific protections to assist the current regulatory framework and would aim to protect investors from harms arising from these conflicts.
Source: Law Firms Sound Alarm Over SEC’s Proposed Clampdown on Robo Advisers’ Use of AI | Law.com
