SEC Chair Says Regulators Should Take AI-Neutral Approach

SEC Acting Chair Mark T. Uyeda recommended a technology-neutral regulatory approach to AI in financial markets and cautioned against overly prescriptive rules that could stifle innovation.

Speaking at an SEC roundtable on AI, which included both the SEC Division of Economic Risk and Analysis and the Division of Examinations, Mr. Uyeda said, "to the extent that advances in technology, such as AI, create potential gaps in our regulatory structure or point to the need for additional guidance, it is the Commission's responsibility to address those gaps or provide guidance in ways that encourage innovation while protecting investors."  

Mr. Uyeda urged the regulators to "avoid an overly prescriptive approach that can lead to quickly outdated, duplicative rules, a 'check the box approach' to compliance, and impediments to innovation." Mr. Uyeda argued the need for data-driven evaluation of risks, and said regulators should be engaging with innovators, technology providers and market participants "[t]o foster a commonsense and reasoned approach to AI[.]"