On July 26, 2023, the SEC issued proposed rules under the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940 to address conflicts of interest that the SEC believes are associated with the use by broker-dealers and investment advisers of predictive data analytics (PDA) and PDA-like technologies, such as artificial intelligence (AI), in investor interactions. The proposed rules seek to prevent firms from using these technologies to influence investor behavior to the investor’s detriment and the benefit of the firm.Continue Reading SEC Proposes New Requirements to Address Conflicts of Interest in the Use of Artificial Intelligence and Similar Technologies
Nathaniel Segal is a Shareholder at Vedder Price and is a member of the Investment Services group.
On July 26, 2023, the SEC issued proposed rules under the Investment Advisers Act of 1940 to narrow the types of smaller investment advisers that can register with the SEC in reliance on the Internet adviser exemption. Currently, an investment adviser with less than $25 million in assets under management that would ordinarily be too small to register with the SEC may register so long as it provides investment advice to clients exclusively through an interactive website and engages in appropriate recordkeeping. An adviser also may provide investment advice to fewer than 15 clients through other means during the preceding 12 months. The amendments are designed to modernize the exemption and address investment advisers that rely on the exemption but continue to provide non-Internet-based advice through adviser personnel.Continue Reading SEC Proposes Amendments to the Internet Adviser Exemption
On March 15, 2023, the SEC reopened the comment period on proposed rules and amendments related to cybersecurity risk management and cybersecurity-related disclosure for registered investment advisers, registered investment companies and business development companies that were proposed on February 9, 2022. The initial comment period ended on April 11, 2022. A previous Vedder Price summary of the proposals is available here. Comments on the proposals are now due by May 22, 2023.Continue Reading SEC Reopens Comment Period for Investment Adviser and Investment Company Cybersecurity Proposals in Connection with Other Cyber and Data Privacy Related Proposals