https://sputnikglobe.com/20230718/use-of-ai-in-financial-markets-needs-rules-to-ensure-no-conflicts---sec-chair-1111953325.html
Use of AI in Financial Markets Needs Rules to Ensure No Conflicts - SEC Chair
Use of AI in Financial Markets Needs Rules to Ensure No Conflicts - SEC Chair
Sputnik International
Rules will be needed to determine how deep, far, and wide artificial intelligence can be used in US financial markets to prevent conflicts of interest and to ensure protection for investors, the SEC's Gary Gensler said Monday.
2023-07-18T00:01+0000
2023-07-18T00:01+0000
2023-07-17T23:58+0000
americas
us securities and exchange commission (sec)
artificial intelligence (ai)
fraud
markets
financial sector
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“As advisers and brokers incorporate these technologies in their services, the advice and recommendations they offer — whether or not based on AI — must be in the best interests of the clients and retail customer[s] and not place their interests ahead of investors’ interests,” Gensler said in a speech to the National Press Club in the US capital. In finance, conflicts may arise to the extent that advisers or brokers are optimizing to place their interests ahead of their investors’ interests, Gensler said. Since coming to office in April, Gensler has been razor-focused in his takedown of technology and applications that could be disruptive to market practices, launching a slew of rules and even criminal investigations against the cryptocurrency industry in particular. Now, he seems to have set his sights on artificial intelligence as well, which he said was a new tool for fraudsters to exploit. He cautioned public companies that made statements on AI opportunities and risks to ensure they include material disclosures that were accurate and did not deceive investors. At the end of the day, the SEC was “technology neutral,” said Gensler, adding that the agency was focused on the outcomes of artificial intelligence, rather than the tool itself.
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artificial intelligence, financial markets, securities and exchange commission, gary gensler
artificial intelligence, financial markets, securities and exchange commission, gary gensler
Use of AI in Financial Markets Needs Rules to Ensure No Conflicts - SEC Chair
WASHINGTON (Sputnik) - Rules will be needed to determine how deep, far, and wide artificial intelligence can be used in US financial markets to prevent conflicts of interest and to ensure protection for investors, Securities and Exchange Commission Chairman Gary Gensler said Monday.
“As advisers and brokers incorporate these technologies in their services, the advice and recommendations they offer — whether or not based on AI — must be in the best interests of the clients and retail customer[s] and not place their interests ahead of investors’ interests,” Gensler said in a speech to the National Press Club in the US capital.
In finance, conflicts may arise to the extent that advisers or brokers are optimizing to place their interests ahead of their investors’ interests, Gensler said.
“That’s why I’ve asked SEC staff to make recommendations for rule proposals for the Commission’s consideration regarding how best to address such potential conflicts across the range of investor interactions,” he added.
Since coming to office in April, Gensler has been razor-focused in his takedown of technology and applications that could be disruptive to market practices, launching a slew of rules and even criminal investigations against the cryptocurrency industry in particular.
Now, he seems to have set his sights on artificial intelligence as well, which he said was a new tool for fraudsters to exploit.
He cautioned public companies that made statements on AI opportunities and risks to ensure they include material disclosures that were accurate and did not deceive investors.
“Make no mistake, though, under the securities laws, fraud is a fraud,” he said. “The SEC is focused on identifying and prosecuting any form of fraud that might threaten investors, capital formation, or the markets more broadly.”
At the end of the day, the SEC was “technology neutral,” said Gensler, adding that the agency was focused on the outcomes of artificial intelligence, rather than the tool itself.
