Fintech & Ecommerce

SEC Chair Says About Developing Rules for AI Use

The U.S. Securities and Exchange Commission (SEC) plans to use its current powers to carry out activities to regulate the use of artificial intelligence-based tools.

SEC Chair Says About Developing Rules for AI Use

SEC Chairman Gary Gensler made a relevant statement last Monday, July 17, during a speech at the National Press Club. He noted that in terms of the perception of technological solutions and their evaluation, the regulator adheres to a neutral position. According to the Chairman of the Commission, the SEC’s concept of activity is focused on studying the result, rather than focusing on the instrument. He noted that the securities laws can become the legal basis for regulating the process of using artificial intelligence, depending on the options for applying advanced technology.

In the context of reasoning about AI, Gary Gensler noted that there is a risk of bias in the digital mind. According to him, the corresponding problem is exacerbated in cases when artificial intelligence is used for hiring or job search, obtaining loans, and choosing an educational institution or a healthcare institution. He stressed that advanced technology can be guided by logical thinking algorithms that are based on historical biases.

Gary Gensler noted that artificial intelligence tools used instead of financial advisors and brokers can push the interests of investors into the background, which is a violation of the rules that provide priority attention to the benefit of customers and retail buyers. The Head of the Commission instructed his subordinates to prepare recommendations on the proposed rules for consideration by the regulator regarding the most effective ways to resolve potential conflict situations in the framework of interaction with investors.

Gary Gensler also noted that AI is a new way for fraudsters to personalize communications and deceive people. Separately, he stressed that advanced technology can influence the state of affairs in the capital markets.

According to Gary Gensler, public companies should inform investors about the opportunities and risks associated with using artificial intelligence-based tools. He believes that this will avoid cheating.

The head of the Commission stressed that the securities laws clearly define the concept of fraud. He noted that the regulator is focused on identifying and prosecuting any form of this type of crime, which poses a threat to both investors and the market as a whole.

As we have reported earlier, China Publishes Final Version of Rules for Use of Generative AI.