The federal government is paving the way for the application of machine learning algorithms to analyze data from eight agencies by requiring standardized data formats. Getting eight agencies to coordinate is going to be difficult. However, it is good to force the regulators to think through their data requirements. Too often the regulators demand additional data on the theory that it may prove somehow useful, but they give insufficient consideration to the specific questions asked or the…

Among the concerns raised by IOSCO was the use of robo-advisers, whether customer information analyzed by such advisers was sufficient, and whether the advisory algorithms were robust enough. Whatever the worries that the regulators may have, it seems clear that the market will move increasingly in towards automation, as a result of both improvements in technology and increases in regulation (e.g., ) that impose substantial costs on firms providing sporadic investment advice to small…

There is quite a lot going on in financial services. Would it be better for NYDFS to stick to its knitting?

While this rule proposal will likely not attract nearly the same degree of attention as the ETF Rule amendments, it is very significant and deserves careful review. The SEC has the difficult problem of (i) allowing for market trading of companies that are too small to be listed on an exchange, while (ii) discouraging fraudulent activity in the securities of these companies. The greater the restrictions that the SEC imposes on trading to prevent fraud, the more that the SEC raises the costs…