SEC Proposes Rule to Eliminate or Neutralize Conflicts in the Use of “Predictive Data Analytics” Technologies

14 August 2023
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Key Takeaways:
  • On July 26, 2023, the Securities and Exchange Commission (“SEC”) issued proposed rules (the “Proposed Rules”) that would require broker-dealers and investment advisers (collectively, “firms”) to evaluate their use of predictive data analytics and other covered technologies in connection with investor interactions.
  • Once a determination has been made that a firm is using covered technology in connection with an investor interaction, the Proposed Rules would require the firm to take affirmative steps to identify and then eliminate or neutralize certain conflicts of interest as well as adopt policies and procedures meeting prescriptive requirements.
  • The comment period for the Proposed Rules will remain open until October 10, 2023.